Sami Miettinen 31. maaliskuuta 2020 Kuinka SaaS-yritys muotoillaan rahoitus- tai myyntikuntoon

Strictly private and confidential 2 Sami Miettinen, Partner Sami Miettinen, Partner MBA, M.Sc. (Econ.), CFA 25 years of investment banking Experience from London at Credit Suisse, Pöyry Capital and SEB Experience from Finland at Nordea, Royal Bank of Scotland, Sisu Partners and Nordic Trustee Published author on negotiation skills with Uusi neuvotteluvalta (WSOY) Sami Miettinen & Juhana Torkki Graduated from Aalto University and Tulane University, CFA +358 400 735 835 sami.miettinen@translinkcf.fi www.youtube.com/samimiettinen www.linkedin.com/in/miettinen @samimiettinen

Strictly private and confidential 3 SaaS-club focus is on sell side M&A and financing advisory preparations Translink Corporate Finance core services Sell side M&A advisory ✓ Project management ✓ Sales materials ✓ Financial modeling ✓ Buyer contacting ✓ Negotiations Buy side M&A advisory Financing advisory Other services ✓ Project management ✓ Target screening ✓ Target contacting ✓ Financial modeling ✓ Negotiations ✓ IPOs ✓ Debt advisory ✓ Fundraising ✓ Private placements ✓ Financial modeling ✓ Valuation ✓ Strategic advisory ✓ Fairness opinions ✓ Distressed situations Focus on mid-market M&A advisory services… …supported by a broad offering of financial advisory

1 The many types of recurring revenue are tested with covid-19

Strictly private and confidential 5 ▪ The index shown on the right shows the Enterprise Value (EV) per run rate revenue of public B2B SaaS companies – 47 companies with a medium run rate revenue of USD 562 million, growth of 23% and gross margin of 73% ▪ While the constituents are significantly larger companies and publicly listed, the index reflects the aggregate valuation levels applied to SaaS companies which act as a benchmark for investors ▪ A discount of at least 30% is generally applied to private companies and this level amounts to approximately 6.9x based on the index Sources: SaaS Capital 27.03.2020 Global SaaS valuation multiples before strongest Covid-19 impact It was fun while it lasted B2B SaaS companies are trading at circa 10x ARR 9.9x 6.9x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x SaaS Capital Index 30% discount Covid-19 outbreak in March will decrease multiples significantly

Strictly private and confidential 6 Covid-19 outbreak has repriced risk The biggest economic turning point of modern times will test recurring revenue models Note: 1VIX is a real-time market index that represents the market's expectation of 30-day forward-looking volatility. Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors' sentiments Sources: S&P Capital IQ 27.03.2020 0 10 20 30 40 50 60 70 80 90 02/01/2008 02/01/2010 02/01/2012 02/01/2014 02/01/2016 02/01/2018 02/01/2020 Lehman Brothers’ collapse Coronavirus outbreak explodes VIX Index CBOE Volatility Index (VIX)1 16.3.2020 82.7 20.11.2008 80.9

Strictly private and confidential 7 Consumer Subscription Software (CSS) Covid-19 will increase demand but will make consumers more choosy Sources: Public data, GP Bullhound, Translink estimates Annual Subscription price Usage Frequency $220 $120 $60 $40 $70 $96 $80 $60 $45 $60 $24 $140 $120 $160 $100 $99 $36 $100 $120 $120 $100 $80 $80 $90 $47 $100 Daily

Strictly private and confidential Consumer Subscription Software Enterprise SaaS 8 SaaS club will focus on Enterprise SaaS Average Revenue Per User (ARPU) Churn Expansion Revenue Mass Market Potential Acquisition Costs Word of Mouth (WOM) Distribution Content Sharing Free vs Paid Users Implementation Difficulty Higher Higher Higher Equal Higher Higher Higher Higher Higher

Strictly private and confidential 9 ▪ Valuation multiples of global tech-enabled business and SaaS companies correlate well with the gross margin of the companies ▪ E.g. Uber and Lyft will never be able to reach valuation levels corresponding to those of Slack or DocuSign due to the aforementioned companies’ cost structure and revenue model Sources: S&P Capital IQ Don’t confuse Transaction platforms with SaaS Gross margin at true SaaS can be outstanding – so can be the valuation levels! Valuation plot – EV/Sales to LTM gross margin 0x 5x 10x 15x 20x 25x 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% EV/Sales LTM Last Twelve Months (LTM) Gross margin -% Transactions SaaS

2 SaaS metrics and valuation

Strictly private and confidential 11 Sell side process If you fail to plan, you plan to fail Exit readiness and preparation for sale Preparation of sales material Dialogue with potential buyers Due diligence and negotiations Signing and closing ▪ Exhaustive, credible and attractive sales story to maximize valuation – Highlights contemplated together with management ▪ High quality sales material according to best practices to efficiently communicate the investment case ▪ Providing sufficient information for buyers to submit an indicative offer ▪ Utilizing our relationships and global network to find the most suitable buyers ▪ We handle all buyer communication on behalf of the client ▪ Management is primed to be able to present key information to the buyers ▪ Facilitating a competitive setting to drive optimal price and terms ▪ Taking full responsibility of coordinating the due diligence process – Working closely with the company to answer all critical questions ▪ Active participation in SPA and SHA negotiations together with legal advisor to secure favourable terms ▪ Coordination of matters related to pre-closing ▪ Closing ▪ Thorough preparation is key for a successful sales process ▪ In close cooperation with the management, we conduct an in-depth analysis of the business and markets and devise: – Business plan – Financial model – Transaction and process structure – Other internal preparations – Valuation Overall responsibility in all phases of the sales process

Strictly private and confidential 12 SaaS service design by Translink Corporate Finance Division of work – Management vs. Advisor 1 Finalizing the business plan together with the management: a) Addressing key growth levers b) Relevant markets and go-to-market strategy c) Financial projections and targets 2 Requirements of a thorough equity story based on the business plan: a) Logical and based on credible arguments and historical cohort and trend analysis b) Attractive for targeted investors, in a metrics the believe in c) Aimed at maximizing value 3 Ensuring that investors understand that the Company is ready for rapid international growth and all internal operational factors are in place to engage in boosted sales efforts and entering new markets 4 Ensuring that the most likely and best-suited SaaS funds, investors and trade buyers have enough time and resources to review the target and provide feedback. The process is typically highly interactive and requires modifying the company data to suit the acquirer frameworks and decision making processes Deliverables Business plan Financial model Based on the business plan and desired KPIs Sales story Highlighting the key growth levers with SaaS KPI metrics such as ARR, churn and LTV Sales materials 1) Teaser 2) IM 3) Management Presentation 4) Buyer modeling Prepared by management Scrutinized by investors Overview of key preparatory steps in a SaaS company preparation for sale

Strictly private and confidential 13 SaaS valuation is a premium segment Most other businesses are valued at cash flow multiples of Enterprise Value Sources: Translink Discounts Premiums Unicorns/SaaS Scaled technology value EV/Sales EV/EBITDA EV/EBIT Most businesses P/E Bankruptcy Tax formula Book value Naked in Naked out Multiple premium High growth & quality • Illiquidity • No control • Lack of governance • Value leakage etc • Liquidity • Majority control • Strong governance • No value leakage etc Resistance to Corona Black Swan SaaS Closed partnerships

Strictly private and confidential 14 ▪ We have extensive experience of discussions with global SaaS investors ▪ This has enabled accumulating an understanding of the dynamics investors apply to justify their valuation ▪ In general, public comparable multiples adjusted for liquidity and size set the ballpark ▪ The framework shown is not exact but provides guidelines on how to position the valuation of the asset and what to address to extract maximum value in the transaction Sources: Translink intelligence Building blocks of a strong SaaS valuation case Our SaaS company valuation methodology Comparable multiples Size Growth Churn Gross margin Company- specific modifiers Anchor Adjustments Public multiples as benchmark for investors Supplemented with our intelligence from our discussions and deals Growth is the key driver and higher growth rates are often demanded for smaller assets Significant discount is applied to smaller companies However, small firms can report higher growth figures A SaaS gross margin of approximately 75% is considered solid Levels below this may warrant a discount Generally investors expect a churn level below 10% while a level closer to 5% can be considered acceptable Other factors relating to the case such as TAM, niche focus, competitive positioning, upsell potential Transaction structure Factors such as secondary/primary, majority/minority as well as accepting liquidity preferences or earn-outs can lead to higher levels Our perception of what investors are willing to pay for the asset Applicable ARR multiple Resistance to Corona Black Swan E.g. remote efficiency business models have resistance

Strictly private and confidential Note: 1EURm; 2Unlevered free cash flow margin not used due to limited availability of info; 32019 figures based on estimates if not published yet Sources: Capital IQ 27.03.2020. Revenues are not adjusted to reflect pure SaaS operations, so growth and profitability are not directly comparable or representative Nordic public SaaS overview EBITDA Margin and Sales growth can be outstanding – beyond “rule of 40%” Key operational and valuation metrics of Nordic SaaS companies 15 Company EV1 Sales1 Sales Growth EBITDA Margin Sales growth + EBITDA margin2 EV/Sales 20193 20193 2020 2021 20193 2020 2021 20193 2020 2021 20193 2020 2021 903 53 41.3% 24.3% 27.3% 31.9% 38.6% 38.2% 73.2% 62.9% 65.5% 17.0x 14.3x 11.2x 479 124 13.2% 2.1% 10.4% 28.3% 34.2% 35.4% 41.4% 36.4% 45.8% 3.9x 4.0x 3.6x 320 148 4.9% 5.9% 10.1% -4.2% 10.3% 13.9% 0.7% 16.2% 24.0% 2.2x 2.0x 1.8x 266 16 36.5% 51.5% 27.8% 45.0% 41.4% 42.6% 81.5% 92.9% 70.4% 17.0x 11.2x 8.8x 201 28 18.6% 18.1% 15.3% 22.8% 29.9% 30.5% 41.3% 48.0% 45.8% 7.3x 6.4x 5.6x 80 38 -3.1% 0.0% 5.4% 25.6% 21.3% 22.2% 22.5% 21.3% 27.6% 2.1x 2.2x 2.1x 39 12 12.0% -1.3% 14.8% 4.1% 13.9% 17.1% 16.1% 12.7% 31.9% 3.2x 3.2x 2.8x 26 6 11.0% NA NA 18.5% NA NA 29.5% NA NA 4.0x NA NA 21 14 13.2% 4.1% 22.9% -7.2% -4.9% 0.6% 6.0% -0.8% 23.5% 1.6x 1.5x 1.2x 15 5 13.7% 16.9% 38.3% -17.0% 13.3% 19.3% -3.4% 30.2% 57.6% 3.1x 2.7x 2.0x 12 9 7.6% 8.1% 11.8% 10.6% 14.0% 15.4% 18.2% 22.1% 27.2% 1.4x 1.3x 1.1x 7 9 2.3% -100.0% NA -6.1% NA NA -3.8% NA NA 0.8x NA NA Median 59 15 12.6% 7.0% 15.0% 14.6% 17.6% 20.7% 20.3% 26.1% 38.8% 3.1x 3.0x 2.5x

Strictly private and confidential 0x 2x 4x 6x 8x 10x 12x 14x 16x 18x 20x 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% EV/Sales 2019 Sales growth + EBITDA margin 2019 16 Premium SaaS valuation requires size, growth and profitability – a unique combination SaaS superstars outperform the crowd Note: 1Unlevered free cash flow margin not used due to limited availability of info. EBITDA margin used instead and added to Sales growth% Sources: S&P Capital IQ 27.03.2020 Valuation plot by the rule of 40%1 Digital services companies Established SaaS Superstar SaaS Black Swan Impact -0.5x EV/Sales Black Swan Impact -1.5x EV/Sales Black Swan Impact -5x EV/Sales Digital services SaaS

Strictly private and confidential 0x 2x 4x 6x 8x 10x 12x 14x 16x 18x 20x 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% EV/Sales 2019 Sales growth + EBITDA margin 2019 17 Once you trade at high value, acquisitions look cheap Admicom-Tocoman case of multiple arbitrage Note: 1Unlevered free cash flow margin not used due to limited availability of info Sources: S&P Capital IQ 27.03.2020 Valuation plot by the rule of 401 Digital services companies Established SaaS Superstar SaaS Digital services SaaS Whilst Admicom trades at 17x Sales, it acquired Tocoman at 3x Sales

Strictly private and confidential 18 ▪ Metrics in table are a part of SaaS benchmark survey conducted by OpenView in 2019 – Rows present common KPIs for SaaS businesses – Columns represent distribution of responses from companies at varying levels of ARR, from USD 50 m ▪ Each cell presents median performance of a company, as well as the range (bottom quartile – top quartile) of each metric at each ARR scale Sources: 2019 OpenView SaaS Metrics Survey Growth – Global SaaS Growth should be initially very fast and then it will get hard, funding is important Size < USD 1 m USD 1-2.5 m USD 2.5-10 m USD 10-20 m USD 20-50 m > USD 50 m ARR growth rate 80% (15-125%) 80% (30-165%) 50% (30-100%) 42% (22-78%) 40% (20-61%) 29% (10-40%) Funding $3m ($1-3m) $8m ($3-15m) $8m ($3-15m) $28m ($15- 43m) $63m ($31- 88m) $88m ($28- 100m) Employees 8 (4-15) 25 (14-40) 47 (30-70) 100 (77-149) 180 (147-269) 555 (385-752) SaaS metrics by company ARR

Strictly private and confidential 19 How to finance private SaaS companies? SaaS specialized capital provider base is growing Illustration of different growth financing options Amount Maturity of business ▪ Appropriate to finance start-up and product adoption risk ▪ Highest cost of capital ▪ Dilutes ownership ▪ Possible loss of control Venture capital and Private Equity ▪ Line of credit that increases with MRR ▪ Multi-year drawdown with capital drawn as needed (no excess borrowing) ▪ Long maturity ▪ No balance sheet covenants or cash reserve requirements SaaS venture and growth debt ▪ Low interest rate and fees ▪ Low availability ▪ Restrictive covenants and/or personal guarantees Bank loans Translink is in continuous discussions with different debt and capital providers in order to find the most appropriate financing solutions to the customers

Strictly private and confidential 20 ▪ Metrics in table are the results of a survey of Finnish SaaS companies in 20191 – Rows present common KPIs for SaaS businesses – Columns represent distribution of responses from companies at varying levels of ARR, from EUR 0- 0.3 m to > EUR 2.5 m ▪ Each cell presents median performance of a company, as well as top quartile of each metric at each ARR scale Note: 1Responses from 116 executives of revenue generating businesses using 2018 figures Sources: State of SaaS 2019 Growth – Finnish SaaS Large ARRs are not common in Finland (yet!) Size EUR 0-0.3 m EUR 0.3-1 m EUR 1-2.5 m > EUR 2.5 m Current ARR growth rate 77% (283%) 67% (132%) 30% (95%) 36% (63%) Expected ARR growth rate 57% (117%) 64% (97%) 50% (90%) 33% (125%) Sales & Marketing spend / ARR 47% (33%) 38% (29%) 29% (44%) 44% (25%) SaaS metrics by company ARR vs. top quartile of each metric

Strictly private and confidential ▪ Customer acquisition and retention drives SaaS success – Additional lever in milking additional revenue from existing customers ▪ Due to the recurring revenue model, there is a significant negative cash flow for an individual customer as CAC exceeds MRR for an – Optimal balance of revenues and costs ▪ As the customer base grows, economies of scale kick in and cover customer acquisition costs and overheads Note: 1Simplified, non-exhaustive and inaccurate for illustrative purposes. Operations and relevant metrics may overlap and do not necessarily follow chronological order Sources: Translink intelligence SaaS model appreciated by professional investors Recurring revenue business is all about getting customers and keeping them Simplified illustration of SaaS customer life cycle and key unit metrics1 21 Marketing Sales Onboarding Support (R&D) KAM CAC (Customer Acquisition Cost) MRR (Monthly Recurring Revenue) ACS (Average Cost of Service) Churn rate Expansion MRR LTV Costs Top line Key unit metrics Operations Activation Churn Comments Heavy investments in early stage to acquire customers Due to SaaS model payback deferred In the long term, CAC must be monitored and controlled to reach targeted profitability Rapid customer acquisition key for long- term success However, CAC recovery must remain viable Light onboarding and easy adoption reduces CAC and drives rate of new customer growth Customer life time (inverse of churn) dictates the value of current users Continuous development to keep product relevant and mitigate risks from disruption Cost of service to determine SaaS gross margin Active support and KAM activities minimize churn and add upsell potential Net negative churn ideal scenario – extracting value from existing user base

Strictly private and confidential 22 Illustration of best-of-class SaaS metrics This level of data/KPI’s are required for SaaS investors indications Sources: Translink intelligence, Company management Key performance indicators Financial development (EUR million) 3.1 4.9 8.1 11.8 16.0 1.8 2.4 3.8 6.7 10.0 14.1 0.0 0.1 0.1 0.7 2.9 5.9 0 2 4 6 8 10 12 14 16 18 2018A 2019A 2020E 2021E 2022E 2023E Net sales (Runrate) Net sales EBITDA Basic information Business model Products and services ▪ Comprehensive operations management system tailored to cover all features required for efficiently running a business ▪ Modern and effortless online service booking platform for consumers Competitive advantage ▪ Best-in-class user experience in solutions to both professionals and consumers and most comprehensive offering ▪ Dominant market position and strong awareness in home market ▪ Efficiently functioning SaaS-enabled marketplace Business plan ▪ Continue to strengthen position in current markets ▪ Scaling the marketplace ▪ Increasing ARR per customer with new features and pricing ▪ Expanding presence in the value chain with access to third parties General SaaS <10% 2019 2.2 MEUR 2/2020 245 EUR 2/2020 +3 950 EUR 2/2020 ~27 MEUR 6/2015-2/2020 50 EUR 6/2015-2/2020 Marketplace +181 000 6/2015-2/2020 ~34 000 2/2020 ▪ The Company operates as a SaaS-enabled marketplace in the consumer industry ▪ The Company provides a comprehensive operations management software to professionals and an online marketplace for consumers ▪ Two main revenue streams – a subscription fee for the SaaS solution and a transaction-based commission from the marketplace - current runrate EUR 3.2m annual revenue level ▪ Strong lock-in and network effects ▪ Founded in 2015 ▪ 28 employees ▪ Offices in Helsinki, Stockholm and Oslo ▪ Majority of the shares owned by management and employees Churn 8 100 2/2020 Professionals 4 100 2/2020 Customers Cumulative GMV Consumer IDs created +1 100 2/2020 Customers ARR CAC LTV Avg. order value Monthly consumers 32% 2019 Share of net sales

Strictly private and confidential 23 Sell side deliverables Leverage the advisors, focus on the growth Illustration Teaser Information Memorandum Management Presentation LOI, SHA and SPA Due Diligence Financial model Description ▪ Brief document to spark interest on the asset for further discussions – 5-10 pages – Key investment highlights – Basic information ▪ Comprehensive information package about the target company – 30-100 pages – Offering, market, competition, operations, financials, strategy ▪ Presentation to drill down on key issues relating to the target and introducing the management team – 3-4 hours – One buyer present – Q&A ▪ Legal contracts covering the purchase price, structure of the transaction and conditions ▪ Exhaustive financial, contract, legal and tax documentation uploaded to a virtual data room for external review – Hundreds of documents – Q&A Translink’s role Customer’s role Other parties ▪ Hands-on detailed financial modeling of the business ▪ Preparing material ▪ Drafting equity story ▪ Preparing material ▪ Drafting equity story ▪ Preparing material ▪ Dry runs ▪ Coordinating negotiations and providing input ▪ Coordinating the process and managing data room ▪ Discussing the business and providing input data ▪ Providing info ▪ Approval ▪ Providing info ▪ Approval ▪ Presenting to potential buyers ▪ Commenting ▪ Approval ▪ Providing documents ▪ Q&A ▪ Legal advisor ▪ Legal advisor ▪ Granular operative spreadsheet model representing the target business – Cash flow, P&L and balance sheet – View on expected valuation – Forecasts

3 Additional material

Strictly private and confidential 67 61 59 48 47 40 38 32 26 20 Translink Carnegie Clairfield Danske Bank IMAP Oaklins SEB Nordea Citi Goldman Sachs 25 ▪ Finnish office founded in 2003 – Roots in IT investments and M&A – Currently team of 8 M&A professionals with diverse experience ▪ Active Nordic M&A advisor – Top 1 Nordic advisors in mid-market M&A with 67 deals between 2018 and 2019 – Tight cooperation within the Nordics and engaging in joint pitches to utilize industry knowledge – Broad coverage and close relationships with corporates, entrepreneurs and private equity Note: 1Deal size USD 0-500 m and excluding audit companies Sources: Refinitiv Translink in the Nordics Undisputed leader in mid-market M&A advisory in the Nordics Nordic mid-market M&A deals 2018-20191 67 Nordic mid-market M&A deals 2018-2019 Close relationships with key decision makers across the Nordics 16 FTEs 8 FTEs 5 FTEs 5 FTEs Helsinki Copenhagen Stockholm Malmö Gothenburg Oslo Jönköping Falun #1 The most active advisor in terms of deal count

Strictly private and confidential 26 Translink Corporate Finance clients Praise from customers in selected recent transactions “Knowing that there is great complexity in overseas transactions when public company acquires a private company, we decided to tender different Corporate Finance advisors in order to ensure the best possible outcome for all parties. Meeting with selected providers we trusted our transaction to Translink and could not have been happier. Translink really has an entrepreneurial spirit embedded in their service and people making it a great partner to work with. We even managed to close the transaction during the peak holiday time due to the dedication and professionalism Translink showed during the process.” Matti Tiainen CEO of Pro Farm “Before starting the investor project we considered not needing an advisor. In hindsight, we would have been in trouble had we not contacted Translink. The workload in a project like this is immense and management should be able to focus on operative activities. Translink’s ability to crunch numbers and make sense of complexity as well as efficiently control multiple simultaneous processes during the project was at a high level. Because of their expertise and unbelievably active service attitude we were able to concentrate on the essentials. Translink saved us from burning out during an intensive six-month period and spared hundreds of working hours from our company by taking full responsibility of the project. I am extremely satisfied with the cooperation and outcome.” Petri Hollmén CEO of Lyyti “Translink coordinated the process professionally from the beginning to the very end. The Translink team’s negotiation skills and experience were vital in order to get through with the transaction and finalize it.” Kimmo Juuti CEO of Chilit Translink had very important role in the transaction process – with their help we were able to find solutions suitable for both parties. They had the leading role in the negotiations, which was tied to extremely strict time table. Translink’s efforts enabled us to concentrate to our daily business operations as well preparing the large production investment. I can warmly recommend Translink as advisor in cross-border M&A’s.” Pekka Miilukangas MD of Miilux

Strictly private and confidential 27 Kluuvikatu 5, 00100 Helsinki www.translinkcf.fi