Offerpad Solutions Inc. · NYSE:OPAD
Offerpad Solutions — Offerpad — SPAC Merger (August 2021)
44 slides from Offerpad Solutions's SPAC merger presentation, Aug 16, 2021
Slide 1: Investor Presentation, August 16, 2021 Update
Investor Presentation August 16, 2021 Update
Slide 2: Disclaimer
Disclaimer About this Presentation This investor presentation (this “Presentation”) relates to a proposed business combination (the “Business Combination”) between Supernova Partners Acquisition Company, Inc. (“Supernova”) and OfferPad, Inc. (the “Company”). The information contained herein does not
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Use of Projections This Presentation contains financial forecasts for the Company with respect to certain financial results for the Company. Neither Supernova’s nor Company's independent auditors have audited, studied, reviewed, compiled or performed any procedures with respect t
Slide 4: Our mission is to provide the best way to buy and sell a home
Our mission is to provide the best way to buy and sell a home. Period. 3
Slide 5: Online penetration in real estate is nascent compared to other industries
Online penetration in real estate is nascent compared to other industries but following a similar trajectory ~$350B1 $210B2 Prescription meds Car buying opportunity today opportunity today $1.9T Real Estate ~6% Digital ~1% Digital opportunity today penetration5 penetration6 99% analog $600B3 ~$650B4
Slide 6: Offerpad – A Perfect Match For Supernova
Offerpad – A Perfect Match For Supernova Supernova’s Acquisition Criteria Offerpad Meets All Of Supernova’s Acquisition Criteria Large and growing TAM ripe for disruption 1 Large addressable market $850 billion Offerpad “Buy Box” immediate opportunity Offerpad is a leading iBuyer platform with a hig
Slide 7: Partnering with Offerpad to create meaningful shareholder value
Partnering with Offerpad to create meaningful shareholder value Full commitment of Supernova team, working hand in hand with board of directors and management, to create the leading next-generation real estate technology platform Internally Externally Assist in attracting the best talent through our
Slide 8: We are transforming the largest asset class: real estate
We are transforming the largest asset class: real estate Market opportunity Highly fragmented market $1.9T 1.4M Annual residential Agents per NAR real estate sales membership3 $950B “Buy Box” 107K opportunity over time1 U.S. real estate brokerages3 $850B <10% “Buy Box” Market share of top brokerages
Slide 9: Our differentiated approach
Our differentiated approach Selling services Buying services Competitive cash No showings or Pick your Free Self-tour Bundle Closing cost Early access to offer in 24 hours open houses closing day local move* Offerpad homes and Save incentives Offerpad homes Sell to Offerpad Buy with Offerpad Cash of
Slide 10: A simple, tech-enabled solution for our customers
A simple, tech-enabled solution for our customers Request a cash Offer 3-minute request form and offer will be delivered within 24 hours Search Offerpad & Non- Offerpad Homes Online Research all homes on the market as well as Offerpad coming soon homes Access Vacant Offerpad Homes via Mobile App Vis
Slide 11: 9 out of 10 – Our customers are our best reference
Our customers are our best reference 95% 81 9 out of 10 Customer Satisfaction Net Promoter Score (NPS) 1 Recommend to a Friend 1 Rating 1 (1) YTD 2021 Survey of approx. 1,400 respondents of customers who sold their home to Offerpad 10
Slide 12: Operational expertise that maximizes value
Operational expertise that maximizes value Best-in-Class Renovations Renovation Time Efficiencies Helix GO Field Automation 23.3 Workforce optimization Internal / external workforce mix 2.0 16.4 15.1 13.2 Local project managers Offerpad employees who oversee each renovation from start to finish 1.2
Slide 13: Renovation before and after
Renovation before and after Tempe, AZ: $62k Renovation, $81k Contribution Margin/Home BEFORE AFTER BEFORE AFTER BEFORE AFTER BEFORE AFTER 12
Slide 14: Offerpad by the numbers
Offerpad by the numbers ◼ ~1,000 Cities and towns ◼ ~$8.7B Transactions to date2 ◼ 95% customer satisfaction3 ◼ 17 Markets1 ◼ $1.7-$1.85B Revenue in ◼ 81 Net promote score (NPS)3 2021E ◼ ~16,000 ◼ 9 out of 10 recommend Renovations to date ◼ Positive contribution margins to a friend 3 per home since
Slide 15: We have achieved rapid growth and scale
We have achieved rapid growth and scale 21 Total markets at year end Homes acquired 19 4,998 6,455 14 12 3,848 10 3,519 8 1,999 5 583 2016 2017 2018 2019 2020 2021E 2016 2017 2018 2019 2020 1 2021E $1.7 5,612 Total revenue ($B) to Homes sold +92% to $1.85 CAGR2 6,000 $1.1 $1.4 4,680 $1.1 5,612 4,281
Slide 16: Highly attractive unit economics
Highly attractive unit economics TTM as of Q2’21 contribution margin per home after interest $35K $(2K) 0.6% $(9K) 3.3% $25K $23K $1K $24K 12.8% 9.0% 8.6% 8.2% Net sale proceeds Holding costs Selling costs Contribution margin Contribution margin after Other services Total Total CM Net sale Contribut
Slide 17: Q2'21 Financial and Operational Highlights
Q2’21 Financial and Operational Highlights Revenue $379M +32% YoY +340% Key Q2’21 Milestones Homes acquired 2,025 YoY • Announced planned expansion into 4 +22% additional markets, bringing anticipated Homes sold 1,259 avg. revenue per home sold YoY end of year market count target up to 21 +16.6M • L
Slide 18: 2021 guidance
2021 guidance Homes sold 5,612 – 6,000 “We’re thrilled with the record number of acquisitions and the extraordinary contribution margin we achieved in the second Revenue $1.7 – 1.85B quarter. At Offerpad, we celebrate the wins, such as our performance this quarter, while also staying focused on keep
Slide 19: Improving KPIs Post-COVID-19
Improving KPIs Post-COVID-19 Revenue ($M) Homes Acquired & Homes Sold Acquired Sold $368 $379 2,025 $287 $284 1,517 $223 1,259 $186 1,166 1,196 1,032 1,258 749 1,018 849 769 460 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Net Income (Loss) & Adj. EBITDA ($M) Net Income Ad
Slide 20: Our traction has been accelerating in top markets
Our traction has been accelerating in top markets Market share in top 10 markets (as % of total home transactions in each market) 2.0% >5x market share improvement in our fastest growing market 1.5% over the last year1 1.0% >3.5x average market share 0.5% improvement in our top 10 markets over the l
Slide 21: Market level contribution continues to expand
Market level contribution continues to expand Contribution Margin After Interest1 LTM as of 6/30/2021 Full Year 2020 10% 9% 9% 9% 9% 9% 8% 9% 8% 8% 6% 6% 6% 5% 5% 5% 4% 3% 4% 3% 3% (0%) (1%) (2%) Market A Market B Market C Market D Market E Market F Market G Market H Market I Market J Market K Compa
Slide 22: Significant untapped growth potential
Significant untapped growth potential 2021E Future opportunity Each market adds Markets 211 ~$0.5B3 in revenue 48 Each % share adds Market-share ~1% ~$6B4 in revenue 4% Annual revenue / $1.7-$1.85B2 13x $23B5 run rate revenue Existing market Potential new markets 2021-2023 Announced (1) 17 as of Jul
Slide 23: We are in early innings in our growth story
We are in early innings in our growth story 3-4% Market share (~0.8% YTD A Increase penetration 2021) $8 Contribution margin uplift billion+1 opportunity Run-rate revenue B Grow new markets 48 Strong Markets Attach rates by 2023 Looking ahead (17 today) $23 1:2+ billion2 C Flex offering Express / Fl
Slide 24: Founder-led & experienced team across real estate and tech
Founder-led & experienced team across real estate and tech Brian Bair Mike Burnett Steve Johnson Founder & Chief Executive Chief Financial Officer Chief Operating Officer Officer Ben Aronovitch Vaughn Bair Casey Bair Chief Legal Officer Chief Real Estate Officer Chief Acquisition Officer Heather Bai
Slide 25: Transaction overview
Transaction overview
Slide 26: Overview of Supernova Partners Acquisition Company
Overview of Supernova Partners Acquisition Company Deep industry expertise and strong sponsorship Delivering on Supernova’s acquisition criteria • Supernova Partners Acquisition Company, Inc. ("Supernova"), a publicly Large addressable market traded company (NYSE: SPNV) raised $402.5 million at IPO
Slide 27: Transaction summary
Transaction summary ($ Millions) Transaction highlights Pro forma valuation • Pro Forma Enterprise Value of $2.4B based on 1.0x 2022E Revenue of $2.4B Pro Forma Valuation Calculation • Existing Offerpad equity holders will roll 100% of their equity and will own 67% of the Offerpad Illustrative Share
Slide 28: Valuation highlights
Valuation highlights Large and growing iBuying opportunity with penetration rates estimated to grow 30%+ CAGR1 over the next decade $850 billion Offerpad “Buy Box” immediate opportunity Penetration rates expected to continue to increase from current ~1% Offerpad is a leading iBuyer platform with a h
Slide 29: We are closely tracking to Carvana's proven execution
We are closely tracking to Carvana’s proven execution : Actual 2020, management projections as of 03/18/21 : 2021E guidance midpoint $5.6 $3.9 $3.9 $2.4 Revenue ($B) $0.9 $1.0 $2.0 $1.8 $1.4 2017 2018 2020 2018 2019 2021E 2019 2020 2022E 2020 2021E 2023E 128% 102% 67% 73% 63% Revenue growth 41% 32%
Slide 30: Capital-efficient model with high returns on investment
Capital-efficient model with high returns on investment Illustrative ROI based on 2020 metrics 95 days Time to cash 15.3% Annualized ROI for every $2 vs. ~5% cost of debt3 91% Annualized ROI in Q2 2021 8.2% Gross margin vs. 7.5% industry average1 92% Revenue CAGR4 $9K Contribution after interest per
Slide 31: Attractive valuation entry point compared to peers
Attractive valuation entry point compared to peers EV / 2021E revenue multiple Digital real estate platforms median1 Vehicle iBuyers median2 3.9x 19% 2.6x discount to Opendoor Median 3.5x 2.6x Median2 66% Opendoor: 1.6x 1.3x3 discount to Digital real estate platforms Gross profit margin 62% discount
Slide 32: Offerpad is poised to deliver attractive returns to investors
Offerpad is poised to deliver attractive returns to investors Illustrative calculations based on current management projections Implied future value at Implied future value at Digital Real Offerpad’s current 2022E Estate Platform’s 2022E multiple of Multiple of 1.0x 2.6x Multiple Expansion (2) $10.3
Slide 33: Appendix
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Slide 34: Offerpad driving significant change in sell-side real estate transactions
Offerpad driving significant change in “sell-side” real estate transactions As long as 6 months or 30+ days & 10+ showings more to buy or sell a 30+ 30-45 Traditional days $1,000s of list 30+ days on days in escrow home ready repairs market Lacks transparency, multiple counterparties, time-consuming
Slide 35: Offerpad is the new way to buy a home
Offerpad is the new way to buy a home ✓ See a home at your own schedule – not only when it works for the seller ✓ Get access to a home with your phone – no agent needed ✓ Use an agent or not at your own discretion ✓ Buy a home that has been refurbished by a skilled experienced team ✓ Offers can be s
Slide 36: Local expertise supercharges our proprietary technology
Local expertise supercharges our proprietary technology Advantaged combination of machine evaluation & human review Public Proprietary Record Private Robust data sources Automated verification, Real estate Offer Data Offer valuation & renovation expert review & request collection delivered modeling
Slide 37: Attractive conversion metrics with significant continued upside
Attractive conversion metrics with significant continued upside 10-15k 17(1) 99% Requests Markets Acquisitions sourced per month via Offerpad Platform Attractive top of funnel acquisition 20+% $3K Organic Blended CAC of seller 77% of sellers contacted 99% Limited competition 1 underwriting agent bef
Slide 38: While further improving cash conversion rates
While further improving cash conversion rates Time to sell distribution (months) Average time to cash ~89% of homes sold in <6 months 1 <6 months > 6 months 138 43 days 133 days days 104 days 95 95 days days 9.5; 10.0 2016 2017 2018 2019 2020 4.5; 5.0 5.0; 5.5 0.5; 1.0 1.0; 1.5 1.5; 2.0 2.0; 2.5 2.5
Slide 39: Our current and planned footprint
Our current and planned footprint Market Strategy Geographic Diversification $23B in run-rate revenue from future markets 1 High Population Growth Cities Affordable Median Sales Price Increasing Employment Characteristics Single Family Rental Buyer Presence 19% 17% 18% 13% 10% 17 7% 14 12 10 8 3% Ex
Slide 40: Ancillary services opportunities
Ancillary services opportunities Product Expansion Strategy Title Today Core transaction services focused on maximizing organic conversion rate Mortgage Energy efficiency Mid-Term Offerpad Flex Ancillary Additional transaction services and services entry into home personalization Home Smart home war
Slide 41: Summary of our warehouse financing agreements
Summary of our warehouse financing agreements Debt capitalization (as of Q2 ’21) Loan to cost: Property debt / inventory 7.5% 7.5% 7.5% Capacity Drawn 96% 97% 97% 3 Senior secured facility 1 (Libor + 4.0%) $225 $160 95% L+5.25% Senior secured facility 2 (Libor + 2.5%) 4001 229 77% L+3.50% L+4.0% L+3
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended (in thousands, except percentages and homes sold, unaudited) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Gross profit $ 50,864 $ 33,537 $ 25,254 $ 19,766 $ 17,861 $ 24,898 Gross margin 13.4% 11.8% 11.3% 10
Slide 43: Non-GAAP Reconciliations, cont.
Non-GAAP Reconciliations, cont. Three Months Ended (in thousands, except percentages, unaudited) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net income (loss) $ 9,190 $ (233) $ (1,321) $ (2,942) $ (7,390) $ (11,465) Interest expense 2,257 1,918 1,62
Slide 44: Thank you
Offerpade move freely Thank you