Owlet, Inc. · NYSE:OWLT
Owlet — Sandbridge Acquisition — SPAC Merger (June 2021)
59 slides from Owlet's SPAC merger presentation, Jun 15, 2021
Slide 1: Analyst Day Presentation
Analyst Day 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: Non-GAAP Financial Measures
Non-GAAP Financial MeasuresThis Presentation also includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, EBITDA and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are
Slide 4: Today's Agenda
Today’s Agenda Introduction 5Key Investment Highlights 6Our Story & The Future of Pediatric Health 11Technology Review 14Value Proposition 21Market Overview 39Commercial Execution 44Financials 53 Contents 12345678 4
Slide 5: Today's Presenters
Today’s Presenters Kurt Workman Co-Founder & CEO 8+ years of experienceFormerly at Techstars and Clearlink Kate Scolnick CFO 25+ years of experienceFormerly at Anaplan and Seagate Lior Susan Founding Partner, Eclipse Ventures 12+ years of experienceOwlet Chairman of the BoardSerial Entrepreneur8 Yea
Slide 6: Key Investment Highlights
Key Investment Highlights 6
Slide 7: Owlet Today - By the Numbers
7 Owlet Today - By the Numbers ~$23BTotal Addressable Market $107M2021E Net Revenue $30CAC 71Net Promoter Score 47% 2019A – 2021E Revenue CAGR (1) 2021E includes projected sale of wellness version of the Owlet Band.
Slide 8: Our Vision for Tomorrow
8 Our Vision for Tomorrow ~$81BTotal Addressable Market 2025 $1B2025E Net Revenue 78% 2021E – 2025E Revenue CAGR 56%2025E Gross Margin 6 yrCustomer relationship across expectant mothers & 2 children
Slide 9: 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 10: Owlet is the Next Connected Ecosystem
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 11: Our Story & The Future of Pediatric Health
Our Story &The Future of Pediatric Health 11
Slide 12: Our Mission: Empower parents to give care at home
Our Mission: Empower parents to give care at home. At Owlet this means connecting parents with the training, tools and support they need to keep their baby safe, healthy and happy. Parenting Problems 12 92Million healthcare visits for children age 0-4 in the U.S. each year 44Lost nights of sleep on
Slide 13: Consumer-Centric Digital Platform for Parenting
13 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* ____________________*Requires auth
Slide 14: Technology Review
Technology Review 14
Slide 15: Democratizing Access to Advanced Technology for Parents
15 Owlet is is Democratizing Access to Advanced Technology for Parents in the Home Wellness Technology & data is locked in hospital Owlet plans to connect parents with data and experts
Slide 16: Owlet Sock
16 Owlet Sock* Current Technology Sock Technology Hospital pulse oximetry technology requires cords, tape and large machinery. Current Sock Data: Heart RateOxygen LevelSleep Trends Core body temperatureRespiration*Dehydration* Wearable Wireless Tailored for the nursery Future Sock Data: *May require
Slide 17: Owlet Cam
17 Owlet Cam Most current cameras on the market are not smart or tailored for the nursery Current Cam: Night vision1080P VideoSound & Motion Notifications Respiratory rate*Inferred tempVisual AiBaby Height Future Cam Data: Sleep qualityAir quality IOT Enabled Grows with Baby 1080P + Night Vision *Ma
Slide 18: Owlet Band
18 Owlet Band* The Owlet Band Data: Current Technology Owlet Band Technology Collects Maternal Heart RateCollects Fetal Heart Rate*Sleep position Kick CountingContraction Tracking**Maternal Respiration** Only available with a practitioner, current non-stress tests require straps, wires and manual mo
Slide 19: Full Stack Technology Ecosystem for the Parenting Journey
Developing a Full Stack Technology Ecosystem to Address the Parenting Journey Hardware:Tracks OxygenHeart RateSleepTemperature* Conception Kindergarten AI & Data*:Baby is getting sick*Baby has health condition*Sleep regression Telehealth & Services:Telehealth Integration*Sleep CoachingEducational Co
Slide 20: Owlet Turns its Data Into a Competitive Advantage
20 Owlet Turns its Data Into a Competitive Advantage with the Aim to Solve Real Customer Problems z ResearchOpportunistic ScreeningClosing the Loop at Home with Telehealth Automation Personalization Cost Reduction Improved AccuracyContinuous Technology ImprovementNew FeaturesAnticipating Customer Ne
Slide 21: Value Proposition: Why do we matter to parents?
V A L U E P R O P O S I T I O NWhy do we matter to parents? 21
Slide 22: 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 23: The Early Parenting Journey Meets Constant Change
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 each year in the U.S.(4) Changes in health & bodyPreparing for labor ~4M babies born each year in the U.S.
Slide 24: 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. 24
Slide 25: 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 26: Owlet is the Anchor Needed to Connect the Nursery
Owlet is the ‘Anchor’ Needed to Connect the Nursery ... Nightlight* Cam Smart Bed* Humidifier* Smart Sock Thermometer* Hey mom, looks like you could use some sleep! We noticed that didn’t sleep well. Let us help! Now that she’s 4 months old she can sleep through the night. Let Jen and Jill walk you
Slide 27: 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. 27
Slide 28: Improving LTV as Product Assortment Expands
Improving LTV as Product Assortment Expands Current 2022 - 2023 Future $498 $1,596 $3,296+ Potential Lifetime Value Smart Socks(Sock+ 2021) Design this slide + + Owlet Cam(Cam 2 - 2022) Dream Lab(2020) Owlet Band*(2021) Smart Crib(2022-23) Connected Nursery(2022-25) Services(2022-25) Accessories & C
Slide 29: 2021 Forward Progress - Customer Usage & Satisfaction
29 2021 Forward Progress - Customer Usage & Satisfaction Net Promoter Score Amazon Star Rating Additional Hours of Sleep monitored Improved Sleep in Just 7 Days 71 102M 92% All products aggregate NPS score. Over 500 basis point improvement in Q1 of 2021 over Q4 of 2020 Aggregate Amazon reviews acros
Slide 30: 2021 Forward Progress - New Product Development
30 2021 Forward Progress - New Product Development Launch planned for H2 Working Toward Commercialization Clear opportunity to leverage data Project Initiated Sock + Telehealth Crib Extends Smart Sock usage and relationship with family up to age 5 Anticipated strong demand from expectant mothers Ram
Slide 31: Value Proposition: Why do we matter to healthcare?
31 V A L U E P R O P O S I T I O NWhy do we matter to healthcare?
Slide 32: More Healthcare Utilization During Early Childhood
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) More Healthcare Utilization During Early Childhood than Any Other Time
Slide 33: And that Care is Costly
33 ... And that Care is Costly Pediatric Office Visits$169/visit x 80M ER Visit $1.3K x 12M 1 Day in NICU $3.5k x ~307k ER Visit$15.6B Office Visits$13.5B 1 Day NICU ~$1.1B (1) https://www.aap.org/en-us/Documents/practicet_Profile_Pediatric_Visits.pdf (page 7; 2004-2007), https://consumerhealthratin
Slide 34: Signaling the Need for Better At-Home Triage
34 Peace of Mind Early Detection ... Signaling the Need for Better At-Home Triage 96.5%Treat & Release 3.5%Hospital Admission (1) Hospital Admission statistics: https://hcup-us.ahrq.gov/reports/statbriefs/sb242-Pediatric-ED-Visits-2015.pdf, ages 0-4(2) No current Owlet products are intended to scree
Slide 35: Importance of Owlet's Anticipated Telehealth Platform
____________________Source: Company disclosuresFrost and Sullivan reports: Telehealth-- A technology-based weapon in the war against the Coronavirus 2020https://www.ncbi.nlm.nih.gov/books/NBK526418/Company estimate based on Embrace.io app tracking softwareThird-party research report from 2020 access
Slide 36: Owlet's Telehealth Solution is 24x7 Care
Owlet’s Telehealth Solution is 24x7 care: content, community, and (professional) care offerings come together to create a proactive care experience ValueParents receive trusted content that is on-point and specific, rather than too abstract and difficult to consume.Original and compelling content wi
Slide 37: Investing in Development of Medical Devices
37 BabySat Building credibility and opening up a new market OTC Sock Expanded claims could lead to deeper penetration OTC Band Designed to make pregnancy care easier Owlet is Investing in the Development of Medical Devices to Address This Large Home Care Opportunity* ____________________Third party
Slide 38: 2021 Forward Progress - Clinical + Regulatory
38 2021 Forward Progress - Clinical + Regulatory Published/Ongoing Studies Care Service Medical Devices in Development Europe 12 Telehealth 3 CE Medical New study by Cleveland Clinic researchers analyzed over 200M hours of biometric data from Owlet Project initiated and R&D underway BabySat, OTC Soc
Slide 39: Market Overview
Market Overview 39
Slide 40: 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 41: TAM Detail
TAM Detail ____________________Source: Company provided materials, Centers for Disease Control and Prevention (CDCP) and Statistia. Utilizes company provided LTV data. U.S. demographic data is based on registered births in 2018 and includes pregnancies. EU demographic data is based on registered bir
Slide 42: Consumer Competition: $300B+ Annual Spend by Parents
42 Consumer Competition: $300B+ Annual Spend by Parents in the U.S. Alone Across Consumer, Healthcare and Technology Technology Healthcare HonestPampersFisher PricePhillipsJohnson & Johnson Amwell Teladoc Doctor on Demand Blueberry Health MasimoNanitNuvoGE
Slide 43: AI-Driven Algorithms and Proprietary Technology
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 44: Commercial Execution
Commercial Execution 44
Slide 45: 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. Already achieved 20%+ penetration in several states in 2021. Similar penetration into more U.S. states will drive key
Slide 46: Penetration Opportunity
46 Compared breakdown by subregion - Google Trends Penetration Opportunity baby monitor Owlet Interest for Owlet WyomingUtahNebraskaArkansasIowa (1) Google Trends, June 2021 Owlet has high penetration in its home state (UT) and states with active foundationsParents are 7x more likely to buy an Owlet
Slide 47: The Cyclical Parenting Journey Creates a Large LTV Opportunity
47 2. The Cyclical Parenting Journey Creates a Large LTV Opportunity Yr 1 6 Years(2 Children) Anchors drive daily usage. Owlet data & app usagecreates a massive telehealth opportunity Owlet Care $20/mo(x 72 months = $1440 LTV) $299* $299 $799 $149 Design help needed Yr 3 *First version of Owlet Band
Slide 48: Reimbursement and Contribution: Owlet's Goals
48 3. Reimbursement and Contribution: Owlet’s Goals Employers, Payers and Providers would all benefit from better in home pediatric care z Safety Sickness - earlier careSleep Primary Care VisitsER VisitsExtra NICU Stays Better SleepCheck on Baby RemotelyMore confidence & less anxietyCoveted employer
Slide 49: International Expansion to Europe, Asia & LATAM by 2025
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 50: 2021 Forward Progress - Penetration
50 2021 Forward Progress - Penetration Impressions in Q1 2021 Y/Y Growth on Amazon Website Visitors in Q1 2021 New Retail Doors Committed 353M 51% 3M 308 Across paid advertising. This represents 101% Y/Y growth. Q1 of 2021 compared to Q1 of 2020 Visitors to the Owletcare.com website. Over 475K blog
Slide 51: 2021 Forward Progress - LTV Expansion
51 2021 Forward Progress - LTV Expansion Owlet Users Own a Cam Customers Willing to Purchase Additional More Dream Lab Purchases New Products In Development 53.8% 61-77% 4X 4 Cam has only been in the market for two years, highlighting the LTV expansion opportunities Owlet baby products Over Q1 2020
Slide 52: 2021 Forward Progress - International Growth
52 2021 Forward Progress - International Growth in Canada Q1 2021 vs Q1 2020 Growth in UK Q1 2021 vs Q1 2020 Growth in Australia Q1 2021 vs Q1 2020 Q1 2021 Launch 132% 546% 68% Nordics Doors increased with the launch of London Drugs Increased distribution to Boots and Curry’s online. Increased aware
Slide 53: Financials
Financials 53
Slide 54: Drivers of Profitability and Long-Term Model
Drivers of Profitability and Long-Term Model 2019A 2023E 2020A 2 YoY Growth - 51.4% 83.1% 3 Gross Margin 46.0% 47.6% 56.3% 1 Net Revenue(1) $49.8M $75.4M 5 TAM Penetration(1)(2) 0.06% 0.09% 1.31% 4 EBITDA Margin (33.4%) (10.9%) 15.8% _______________________________Assumes FDA clearances of ‘OTC Sock
Slide 55: 2021 Forward Progress - Q1 Financial Results
55 2021 Forward Progress - Q1 Financial Results Revenue Gross Margin Key Executive Hires and BOD Appointments 57.9% 47% 6 1100 bps improvement Y/YDriven by new products and COGs improvements Y/Y Revenue GrowthExceeding internal targets by ~10% $21.9M Demonstrating FinancialPerformance
Slide 56: Significant Revenue Growth and Margin Opportunities
56 Significant Revenue Growth and Margin Opportunities Focused Near-Term Investments to Build Platform Scale Strong Balance Sheet to Support Investment Attractive Financial Characteristics to Drive Growth
Slide 57: Summary
Summary 57
Slide 58: 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 59: Questions?
Questions? 59