Nerdy SPAC Presentation Deck
March 2021, 52 slides
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investor presentation march | Nerdy
disclaimer | Nerdy
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transaction summary sponsored public listing pace pace group raised million through the of a special purpose acquisition company pace tech opportunities corp pace or pace in concurrent with the pace secured an additional million of forward purchase agreement commitments increasing pace capital base to million pace has entered into a transaction agreement to merge with live learning technologies a or the company will be listed on the under the ticker symbol with a majority independent board following the transaction existing investors and management are expected to retain a ownership stake with founder chairman chuck expected to remain the individual shareholder in connection with the transaction pace has raised a million pipe of common equity at share in a private placement anchored by franklin of pension plan and industries as well as several other leading institutional investors pace expects to effect public listing with an expected market cap of million and target net cash of approximately million represents an attractive entry multiple of projected revenue of million transaction combines a strong entrepreneurial team and best in class operations with a fully funded balance sheet in an industry that is rapidly shifting is a leading direct to consumer platform for live instruction and a leading gig economy platform purpose built for teaching and learning | Nerdy
pace introduction select tech investments has a long history of supporting and investing in high growth companies including platforms and track record of identifying markets at in points and supporting companies poised to take advantage of structural market changes select recent track record of helping private companies transition to the public markets has taken companies public since the most of any sponsor select investments and impact investing is a core focus including direct to consumer learning platforms has a long history of investing in pace raised its in and has completed to date pace has announced four business combinations with all fours trading above share before or shortly after closing has the private markets impact efforts with the rise fund and rise portfolio companies having educated million students is a priority focus for our impact investing efforts given outsized positive social impact associated with high quality education low current digital penetration and high return potential our impact and experience allowed us to appreciate the platform that has created is a great match for investment criteria ast | Nerdy
pace joins high quality existing investors and board existing investors existing board of directors has invested over billion in leading technology companies and has helped guide through more than and strategic acquisitions chuck learn capital is a venture capital focused on breakthroughs in education technology rob woody existing investors and board have deep experience in consumer and learning platforms mes | Nerdy
large tam ripe for disruption trillion of direct to consumer education market is moving quickly covid forced a step function shift to adoption that we expect to persist leading gig economy platform for learning is disrupting the market for live direct to consumer learning and is a leading one on one platform vertically integrated and delivers a superior personalized experience increased convenience and value to learners and experts attractive unit economics improving with shift to and product innovation improving cross sell conversion and retention of immediately pro table at time of purchase scalable technology platform network effects and data create deep competitive moat purpose built tech stack delivers modality learning and machine learning platform matches learners and experts based off attributes to drive better outcomes and higher learner and expert satisfaction adaptive learning diagnostic testing and data feedback loops improve learning results and enable personalization based on an individual knowledge and competency network effects engagement data personalization performance more learners more experts engagement business is at an in point business is in now as revenue growth and engagement are accelerating multiple growth vectors including adding more subjects to core one on one tutoring expanding further into group classes and self guided study international expansion and potential a opportunities creating positive change platform increases access by lowering the cost and removing barriers to high quality instruction free classes provide millions of hours of live instruction self study platform provides access to assessments practice problems and diagnostic tests at no cost experienced entrepreneurial team led by founder chairman chuck who launched in deep senior management team has extensive technology consumer brand and experience at companies such as dollar shave club and investment thesis for | Nerdy
transforming how people learn seamlessly connecting experts to learners in any subject anywhere | Nerdy
by the numbers revenue active learner growth yoy growth revenue growth yoy growth gross margin session growth yoy growth paid learner score learners accessed free classes | Nerdy
business is growing rapidly and accelerating historical and projected revenue historical and projected revenue yoy yoy | Nerdy
learning digital transition is happening now at a faster rate than previous adoptions commerce digital share global learning digital share are more likely to use learning compared to a year ago plan to use learning services going forward years years | Nerdy
large fragmented market ripe for disruption academic tutoring test prep professional cations training skills other education direct to consumer learning total market expected in | Nerdy
of model comparison | Nerdy
flagship business leading platform for live tutoring personalized learning in any subject anywhere at any time legacy businesses varsity tutors | Nerdy
small group classes one on one adaptive self study a comprehensive learning destination going beyond one on one to meet more learning needs a continuous format learning experience one on one adaptive self study small group classes large group classes adaptive self study adaptive self study large group classes large group classes small group classes one on one small group classes adaptive self study one on one large group classes | Nerdy
our two sided network learners and experts learners audience breakout diverse population servicing learners across high school college grad professional experts key motivations key segments competitive investing reactive remediation enrichment passion helping people learn supplemental income flexibility convenience hold a graduate degree or more typical occupations teacher professor working professional grad college student retirees self employed hours worked per week | Nerdy
superior value proposition for both sides of the network value for learners value for experts better experience hand picked experts tech enabled tools multiple learning formats strong income potential less hassle cant earnings without effort to new customers convenient learners can interact when where and how they want including scheduled and on demand instruction flexible schedule work where when and how you want with demand in subjects cost effective enabling exceptional experience at a great value platform experience technology tools personalization and collaborative platform make instruction engaging and enjoyable trust trusted brand for high quality instruction get paid on time securely paid frequently with direct deposit | Nerdy
powerful and reinforcing growth flywheels more learners active learner growth growth score million subject format expansion leverage experts to create a more comprehensive learning destination that meets more learner needs creating more on ramps for new customers cross sell opportunities personalized learning experience quality experts expert platform more opportunities delivers more earnings quality interactions for top experts our end to end seamless experience makes the whole process more convenient instructor rating | Nerdy
an operating system engineered for learning for intelligence for human interaction interaction layer adaptive learning layer matching layer curation layer data lake aly | Nerdy
curation layer identifying the best experts with our rich of past learning interactions we the critical traits knowledge and experience that highly correlate to better outcomes | Nerdy
powered learner expert matching matching layer selecting the best expert we optimize across a high dimensional set of features to identify the learner to expert matches with the highest projected probability of a successful interaction rating | Nerdy
continuous evolution across learning journey assessment personalized learning plan adaptive learning layer personalizing the learning path to mastery assessment adaptive learning plan assessment model derived insights at the heart of a knowledge inference engine capturing every decision to continuously adapt the sequencing of curriculum learning plan evolves | Nerdy
two way video built in graphing calculators reference tools collaborative share options live help interaction layer optimizing human interaction an system interleaving human judgment with machine intelligence collaborative work space purpose built for learning subject tools and references recordings and snapshots for post session review integrated personalization features scaled empathy we i | Nerdy
consumers love their experience net promoter scores it was exactly what my son needed in just a few weeks he had a better grasp on and raised his grade i highly recommend them to anyone that needs additional help | Nerdy
building a lasting brand founded in trust brand awareness this year aided awareness believe varsity tutors offers high quality instruction believe varsity tutors is a brand they can trust | Nerdy
expert engagement is strong and growing sessions taught per active expert i love varsity i always tell my teacher friends to become a varsity tutor i also tell students they can use this platform overall love working for this company i love that i don have to seek out clients and i have access to so many of them easily to in my schedule i also love teaching classes it is also so great to see a student succeed after only a few sessions with them | Nerdy
strong and accelerating dynamics active learners sessions learner to expert is spinning personalization subject expansion and new formats driving acceleration in engagement | Nerdy
multiple vectors to drive sustainable growth i a a i a targeted a international expansion product innovation self study large format classes i a small group classes professional test prep academic | Nerdy
small group classes growth vector is taking off small group classes revenue revenue yoy | Nerdy
format expansion improving already strong unit economics year net sales user by of formats used pro table on purchase immediately paying back expansion driven by format engagement | Nerdy
competitive landscape delivers high quality personalized live learning from top experts regardless of geography | Nerdy
covid impact and recovery and beyond created short term challenges some schools went to optional grading many standardized tests and professional exams were suspended which led to declines in our test prep business we responded with innovation we transition to providing live instruction invested in new products integrated learning formats into single destination improved unit economics and became self sustaining in turn to consumer need for supplemental help grows as students look to catch up academically standardized and professional testing resumes accelerated long term trend toward consumers realized superior convenience quality and value of experience of | Nerdy
improving access to high quality learning resources free live classes free assessments practice tools leverages its large group class learning platform to provide access to high quality live instruction in academics enrichment test prep at no cost to learners initiative has fueled a new found love of learning for hundreds of thousands of students all completely free library of over practice problems quizzes and diagnostic assessments in over one hundred subjects are delivered on our platform and via mobile at no cost enabling millions of learners to access quality asynchronous tools to study and improve academic studies have found that tutoring lifted average learners percentile to top of the class performers percentile is empowering more learners to achieve these greater outcomes by making high quality tutoring more affordable and accessible | Nerdy
founder led seasoned management team with deep technology and direct to consumer experience chuck weber dan lee mike | Nerdy
financial performance | Nerdy
our monetization model free large group classes adaptive self study of free class sessions learning interactions typical order hours typical hour paid small group classes one on one ores | Nerdy
yoy revenue growth rates schools shut down test center closures we built an agile and resilient business school and testing center closures related to the pandemic impacted the business in the half of completed transition to in new product innovation and increased adoption of learning drove cant growth in | Nerdy
historical and projected revenue strong core business with multiple new growth vectors drive topline expansion one on one strength provides strong foundation for growth multiple learning formats enable increased consumption and retention classes business continues to experience strong growth as we penetrate this large and growing market via subject coverage classes business exits incubation period and experiences strong growth | Nerdy
gross margin improvements driven by product expansion historical and projected gross margin shift toward improved margins over last several years growth in classes expected to produce future gross margin expansion | Nerdy
summary historical and forecast revenue growth acceleration in driven by format strategy targeted marketing investments extend reach to drive active learner growth tech and product investments ensure remains at the forefront of innovation a increase driven by and public company costs revenue growth with continued gross margin expansion positive in | Nerdy
scalable operating model revenue growth gross margin tech product a revenue adjusted margin margin long term targets long term opportunity for growth expected as shift to learning gains share over the coming decade and beyond | Nerdy
sources uses pro valuation sources uses illustrative post transaction ownership illustrative pipe investors sponsor investors existing shareholders post transaction valuation illustrative | Nerdy
public direct to consumer learning platform consumer facing digital gig economy platform consumer facing platforms leading learning platform in north technology solutions purpose built for learning direct to consumer go to market similar gross margins leading digital services gig economy platform categories across diverse industry verticals large market opportunity with low penetration leading vertical large and expanding tams with low penetration similar gross margins defining | Nerdy
operational revenue growth gross margin | Nerdy
valuation discount to current | Nerdy
continued strong business momentum and demand for our products continued strong active learner growth continued strong user retention and adoption of format learning continued strong growth in small group classes continued mix shift to higher gross margin products remain con dent in the forecast update through | Nerdy
large tam ripe for disruption leading gig economy platform for learning attractive unit economics scalable technology platform key network effects and data create deep competitive moat business is at an in point creating positive change experienced entrepreneurial team | Nerdy
anticipated transaction date event transaction agreement executed transaction announced march preliminary proxy materials filed with the sec mail final proxy materials to pace shareholders set record date for pace shareholders vote hold pace shareholder vote and close transaction | Nerdy
financial appendix | Nerdy
non reconciliations | Nerdy
illustrative fully diluted share count | Nerdy
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