A digital financial brand for the next generation of Canadians

Transcription

1 A digital financial brand for the next generation of Canadians Mogo Finance Technology Inc. NOVEMBER 2015

2 Forward-Looking Statements Forward-Looking Information: This document contains forward looking statements that relate to our current expectations and views of future events. In some cases, these forward-looking statements can be identified by words or phrases such as may, might, will, expect, anticipate, estimate, intend, plan, indicate, seek, believe, predict or likely, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The Company has based these forward-looking statements on its current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other things, statements relating to: the Company s expectations regarding its revenue, expenses and operations; the Company s anticipated cash needs and its needs for additional financing; the Company s ability to protect, maintain and enforce its intellectual property; third-party claims of infringement or violation of, or other conflicts with, intellectual property rights; the Company s plans for and timing of expansion of its solution and services; the Company s future growth plans; the acceptance by the Company s customers and the marketplace of new technologies and solutions; the Company s ability to attract new customers and develop and maintain existing customers; the Company s ability to attract and retain personnel; the Company s expectations with respect to advancement of its product offering; the Company s competitive position and the regulatory environment in which the Company operates; and anticipated trends and challenges in the Company s business and the markets in which it operates. Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and we cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, prospective purchasers of Common Shares should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those listed under Risk Factors in the prospectus dated June 18, 2015 (the prospectus ) available under our profile on SEDAR ( If any of these risks or uncertainties materialize, or if assumptions underlying the forward-looking statements prove incorrect, actual results might vary materially from those anticipated in those forward-looking statements. Information contained in forward-looking statements in this document is provided as of the date of the prospectus, and we disclaim any obligation to update any forward-looking statements, whether as a result of new information or future events or results, except to the extent required by applicable securities laws. Accordingly, potential investors should not place undue reliance on forward-looking statements or the information contained in those statements. Non-IFRS Measures: This document makes reference to certain non-ifrs measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company s results of operations from management s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-ifrs measures, including loan originations, adjusted EBITDA and provision rate, to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-ifrs measures in the evaluation of issuers. Our management also uses non-ifrs measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Please refer to the Management s Discussion and Analysis in the prospectus for further information and a reconciliation of non-ifrs measures we use in the prospectus to the comparable IFRS measures. 2 / 25

3 Our vision Mogo is building a digital brand that empowers consumers with simple financial solutions to stay in control of their financial health. 3 / 25

4 Strong growth and proven platform 2003 FOUNDED 325 EMPLOYEES 1MM LOANS ORIGINATED TO DATE $41MM Q ANNUALIZED REVENUE 122% Q REVENUE GROWTH 135K MEMBERS 4 / 25

5 Key investment highlights Massive market opportunity driven by tech enabled financial revolution Powerful platform and disruptive value proposition Industry pioneering team Market and technology leader Millennial brand and proven customer acquisition Rapid growth and compelling business economics 5 / 25

6 Tech enabled financial revolution Consumers want digital experience Dramatically lower costs (in branch transaction is 50x a mobile transaction) Better products Better experience Better business model Big data helps deliver better product and experience Smartphone and internet perfect for financial services 6 / 25

7 Huge market opportunity $278B $82B 70MM $600B+ Total addressable market for consumer loans Canada Total credit card debt in Canada Credit Cards in Canada Total annual spend on debit and credit cards in Canada McKinsey estimates that up to 60% of banks profits could be lost by 2025 to nimble fintech firms. 1 1McKinsey 2015 Annual Review of Global Banking 7 / 25

8 Loans that empower consumers at all levels PRIME UP TO $35,000 PERSONAL LOAN Save up to 65% vs credit cards Only full spectrum lender in Canada UP TO $2,500 LINE OF CREDIT Save up to 50% vs consumer finance loans SAVE UP TO 65% SUBPRIME UP TO $1,500 SHORT TERM LOAN Save up to 50% vs payday loans Level up program Provides everyone with the opportunity to lower their rate and get out of debt sooner 8 / 25

9 Killer value proposition Open an account for free in about 3 minutes and get... Access to credit Free Prepaid Visa Card Free credit score $35,000 Coming soon 702 With rates starting at 5.9% Chip, PIN and PayWave with no monthly fee More than 50% of Canadians do not know their credit score 9 / 25

10 Mogo solution - enabling financial control LOANS FOR THE FULL CREDIT SPECTRUM MOGO ACCOUNT ONLINE DASHBOARD SELF-SERVE $ 35K BORROW SIGN UP IN 3 MINUTES MANAGE App coming soon MOGO CARD SPEND FREE MEMBERSHIP MOTIVATE 4/26 LEVEL UP SMART ALERTS CHALLENGES PERKS EDUCATIONAL CONTENT CREDIT SCORE Just on-time payments till you Level Up to a lower rate. 10 / 25

11 The Mogo app 11 / 25

12 The power of Mogo s advanced technology platform Better user experience Advanced Decisioning New products Enables Partnerships Design driven Enable frictionless customer experience Customer self-service Machine learning algorithms Over 1000 data points Proprietary Mogo score Data driven personalization Platform enables launch of new products to users. Future products include mortgages and small business loans. Technology enables partners to offer our solution to their customers. 12 / 25

13 At our core, we re a technology company 100+ TECHNOLOGY & DEVELOPMENT TEAM $100MM+ INVESTED TO DATE 13 / 25

14 Building a digital brand for Canadians Direct Mail Social Media Content Marketing Online Marketing Channels Mogo pre-paid Visa Retail 9MM millennials driving the digital revolution Partnerships Public Relations Exclusive Events Outdoor Campaign 14 / 25

15 Innovative retail approach enhances online brand New Toronto store - Queen Street West (Opening Soon) 15 / 25

16 What sets Mogo apart Disruptive value prop Full spectrum loans Free prepaid card Free credit score Technology 100+ team building a digital financial platform Brand Millenial We stand for financial fitness We make finance fun Experience and capital $100MM+ invested to date 1M loans originated to date Go-to-market Direct Retail Partnerships $250MM in available loan capital 16 / 25

17 financial results and growth strategy 17 / 25

18 Financial highlights Rapid Revenue Growth Strong Credit Peformance Attractive Product Economics Well Capitalized Multiple Growth Opportunities 18 / 25

19 Strong capital position to support growth $ Loan Originations NOV 2014/ MARCH 2015 $20MM EQUITY FINANCING JUNE 2015 $50MM IPO AUGUST 2015 $50-$200MM 1 CREDIT FACILITY (FORTRESS) $70 $60 $50 $40 $30 $20 FEB/MARCH 2014 $10MM EQUITY $30MM CREDIT FACILITY (FORTRESS) Available loan capital of up to $250MM from cash and untapped credit facility Q Q Q Q Q All dollar figures in millions 1 Initial credit facility of $50MM, expandable up to $200MM based on certain conditions 19 / 25

20 High-return portfolio driving growth Gross loans receivable ZIP MINI LIQUID $37.5MM Short LOC up to Installment $29.0MM Description term loan up to $2,500 Loan up to $35,000 $22.3MM $1,500 Avg. loan size $690 $874 $7,605 Avg. APR NA 39.9% 22% DEC 31, 2014 MAR 31, 2015 JUN 30, 2015 Avg. term 2 weeks 1 year 3 years LONG-TERM SHORT-TERM Avg. FiCO / 25

21 Delivering strong revenue growth $ % GROWTH $8.4 $9.1 $10.3 $23.4 $6.8 $15.3 $17.4 $4.7 Provision rate % Q2 Q3 Q4 Q1 Q % 4.6% 4.6% 4.5% 4.7% 4.6% 4.6% All dollar figures in millions. 1 Q2 Annualized. 21 / 25

22 Platform enables multiple growth opportunities 1. Grow member base $151MM 2014 LOAN ORIGINATIONS 2. Expand existing products (MogoLiquid) 3. New products / partnerships (eg. small business loans, mortgages) 4. Expand financing strategy (marketplace lending, securitization) $278B CANADIAN CONSUMER DEBT OPPORTUNITY 22 / 25

23 Industry pioneering management team Dave Feller Founder & CEO Founded MOGO 2003 Lisa Skakun Chief Legal & Administrative Officer Former General Counsel, SVP Corporate Development & Corporate Secretary at Coast Capital David Baldarelli Chief Credit Officer Formerly Chief Credit Risk Officer for HSBC Finance, responsible for portfolio of $6B Greg Feller President & Chief Financial Officer 16 years on Wall Street. Goldman Sachs & Co, Lehman Brothers, UBS Investment Bank Eric Miles Chief Technology Officer 30 years in leading technology companies IBM, Bank of America, Sybase Thomas Groh Vice President, Data Expert in Data Analytics Co-founder and CTO at Bi3 Solutions Carlos Medeiros Vice President, Credit Risk Data Scientist, former roles include Head Financial Risk Management & Head of Consumer Lending at HSBC Finance 23 / 25

24 Additional facts Ticker Symbol TSX: GO IPO Closing Date June 25, 2015 Current Share Price (at October 28, 2015) $3.70 Market Cap (at October 28, 2015) ~$67MM Cash and Cash Equivalents 1 $52.7MM Net Loans Receivable 1 $33.1MM Shares Outstanding 18.2MM Management & Board Ownership 25% 1 As at June 30, / 25

25 CUTTING THE CORD 25 / 25