Owlet, Inc. · NYSE:OWLT
Owlet — Owlet Baby Care — SPAC Merger (February 2021)
72 slides from Owlet's SPAC merger presentation, February 2021
Slide 1: Investor Presentation
Investor Presentation 1
Slide 2: Disclaimers
Disclaimers About this Presentation This 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
Slide 3: Disclaimers
Disclaimers Financial Information; Non-GAAP Financial Measures The financial information and data contained in this Presentation is unaudited and does not conform to Regulation S-X. Such information and data may not be included in, may be adjusted in or may be presented differently in the registratio
Slide 4: Contents
Owlet Investor Presentation Contents 1 Introduction 5 2 Digital Platform for Parenting 10 3 Our Story 14 4 Owlet Today 19 5 Future Healthcare Opportunities 27 6 Growth Strategy 35 7 Strong Financial Performance 43 8 Appendix 52 4
Slide 5: Today's Presenters
Today’s Presenters Sandbridge Owlet Ken Suslow Richard Henry Lior Susan Kurt Workman Michael Abbott Jordan Monroe CEO CFO Founding Partner, Co-Founder & CEO President & CFO Co-Founder & CINO Eclipse Ventures ▪ Founding managing ▪ Principal ▪ 12+ years of ▪ 8+ years of ▪ 25+ years of ▪ 8+ years of pa
Slide 6: Transaction Summary and Timing
Transaction Summary and Timing • Existing stockholders / option holders to receive ~75% of the pro forma equity Ownership • Sandbridge founders and affiliates to own ~2%, Sandbridge investors to own ~17%, and common equity PIPE investors to own ~6% • $230 million cash in trust Capital Structure • $7
Slide 7: Detailed Transaction Overview
Detailed Transaction Overview Estimated Sources and Uses ($ in millions) Pro Forma Valuation Common Equity Sources Sandbridge PIPE Investors (1) Founders and SPAC Trust Equity $230 Illustrative Price per Share $10.00 (3) Affiliates 5.6% Company Stockholder / Optionholder Equity Rollover (2) 1,000 Pr
Slide 8: Ken Suslow, Chairman/CEO Sandbridge – Why Owlet
Ken Suslow, Chairman/CEO Sandbridge – Why Owlet 1 Leading Position in Highly Attractive Sector with Technology Moat 1 2 Rare Combination of Best in Class Core Business + Clear Path for Future Outsized Growth 3 Positioned to Dominate the Connected Digital Nursery of Tomorrow 4 Visionary and Proven Le
Slide 9: Lior Susan, Founding Partner of Eclipse Ventures- Why Owlet
Lior Susan, Founding Partner of Eclipse Ventures- Why Owlet 1 Mission Driven • “Keep Every Baby Healthy and Happy” 2 Massive TAM • Large and growing parenting market TAM (~$81bn+) spanning consumer / medical / telehealth markets High-quality Founders and Management Team 3 • Ability to ‘think big’ •
Slide 10: Digital Platform For Parenting
Digital Platform For Parenting 10
Slide 11: Digital Platform for Parenting
Digital Platform for Parenting Strategic Investments: ● Strong Brand ● Fantastic User Experience ● Connected Nursery Consumer Centric Strategic Investments: Technology Healthcare* enabled at home ● Full Stack Technology Strategic Investments: ● Connected Ecosystem ● Medical Devices* ● Clinical Evide
Slide 12: Parenting Gets Upgraded
Emerging Trends Make it the Right Time to Bring Technology To Parents Parenting Biometrics Healthcare Gets Used Moves Upgraded Everywhere Home Parents are now more engaged 92 million people will have Telehealth market potential of than ever pulse oximetry on their wrist $122 billion(6) Fathers in 20
Slide 13: We Have Built a Passionate Management Team With a Strong Track Record
We Have Built a Passionate Management Team With a Strong Track Record Kurt Workman Michael Abbott Jordan Monroe Zack Bomsta Co-Founder & CEO President & CFO Co-Founder & CINO Co-Founder & CTO 8+ Years of Experience 25+ Years of Experience 8+ Years of Experience 8+ Years of Experience Techstars Clear
Slide 14: Our Story
Our Story 14
Slide 15: Every Parent Has the Same Questions and Concerns
Every Parent Has the Same Questions and Concerns Safety* Sickness* Sleep Is she breathing? When should I call Will we ever my doctor? sleep again? • SIDS: #1 cause of death in infants • 92 million well, sick, and ER visits in first 4 • Parents lose 44 nights of sleep during 1-12 months old(1) years
Slide 16: The Early Parenting Journey Meets Constant Change & New Challenges
The Early Parenting Journey Meets Constant Change & New Challenges... Becoming a parent is the biggest change we go through in life. We change everything from spending habits to schedule, and new parents with very little training become caregivers overnight. Taking over the roles of doctor, nurse, d
Slide 17: Fraught with a 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. 17
Slide 18: Creating a Holistic Experience for Parents
Owlet is the Next Connected Ecosystem That Brings Technology & Data To Modern Parenting Creating a Holistic Experience for Parents Livongo Apple Peloton iRhythm Digital Health Monitoring Personal Electronics At-Home Fitness Parenting TAM: ~$81B(1) ____________________ Source: Company disclosures. (1
Slide 19: Owlet Today
Owlet Today 19
Slide 20: Owlet Sock
Owlet Sock #1 Monitor (1) 96% Report reduced anxiety (2) 850k+ Babies Monitored (3) ____________________ Source: Company disclosures (1) The NPD Group, Inc./U.S. Retail Tracking Service, Baby Monitors, November 2020 (2) https://journals.sagepub.com/doi/10.1177/2333794X17742751 (3) Estimate using Owl
Slide 21: Owlet Cam & Sleep
Owlet Cam & Sleep #1 Ecosystem (1) 94% Sleep Improvement (2) 7.8x Ave Daily App Usage (3) ____________________ Source: Company disclosures (1) NPD Data (2) https://journals.sagepub.com/doi/10.1177/2333794X17742751 (3) Company estimate based on app tracking software 21
Slide 22: Owlet Band
Owlet Band Winner ‘Tech to Change the World’ (1) Potentially First in Category ____________________ Source: Company disclosures (1) 2019 Consumer Electronics Show (CES) Innovation Awards 22
Slide 23: The Most Compelling Brand in Parenting
The Most Compelling Brand in Parenting... 21 Baby Industry Awards Owlet NPS(1) 76 68 50 Sock Duo Dream Lab 45 33 Other NPS(2) Consumer Brands 40 Johnson & Phillips & 15 / Electronics Johnson Motorola Design and Innovation Awards #1 77% Customers would Ranking in the top 3 consider other baby brand m
Slide 24: Is Creating the 'Anchor' Needed to Connect the Nursery
...Is Creating the ‘Anchor’ Needed to Connect Software & Content the Nursery... Hey mom, looks like you could use some sleep! Cam Now that Ivy is 4 months old, she can start to wean those middle of the night feeds. Swipe to learn about Dream Lab Nightlight* Smart Sock Thermometer* Smart Bed* Humidif
Slide 25: 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. 25
Slide 26: Key Competitive Moats
Key Competitive Moats Ranking in the Connected top 3 brand metrics Proprietary 9-Year Head Ecosystem Data Advantage Start w/Tech & Brand #1 77% 1.5M 9B 24+ 40 Customers would Heartbeats Monitored Ranking in the top Parents Used Trademark consider other baby Per Night(2) Issued 3 brand metrics(1) the
Slide 27: Future Healthcare Opportunities
Future Healthcare Opportunities 27
Slide 28: 40X More infant deaths from SUIDs than car accidents
~3,500 Infant deaths from SUIDs every year(2) 40X MORE 80 Infant deaths happen in a car accidents every year(1) ____________________ Sources: (1) https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812719 Figure 3 (2) https://www.cdc.gov/sids/data.htm 28
Slide 29: One day 'Every Baby' will have access to monitoring
We believe: One day ‘Every Baby’ will have access to monitoring 29
Slide 30: Opportunities from the 'Every Baby' Future
Opportunities from the ‘Every Baby’ Future: Consumer Clinical The Smart Sock is a We believe a medical compelling anchor for version of the Sock will creating the connected become a critical tool nursery for pediatrics* ____________________ *Pending authorization from the FDA 30
Slide 31: The First Years of Life Are Expensive for Healthcare
The First Years of Life Are Expensive for Healthcare... The First Year of Life: Healthcare Costs by Age 3.4M 14M 16M ER Visits(1) Sick Visits(2) Well Visits(2) 92M Visits Well Visit ER, sick, & well visits Sick Visit (ages 0-4)(1)(2) 2009-10 Group Male ____________________ Source: Company disclosure
Slide 32: New Screening Functionality Has Massive Potential for Pediatrics
...and New Screening Functionality Has Massive Potential for Pediatrics... Supra Ventricular Tachycardia (SVT)* Device monitoring for 12 hrs/day Opportunistic screenings* Critical tool for pediatrics Central Hypoventilation Syndrome (CHS)* Every Year** ● Almost every infant gets sick ● 2.1M outpatie
Slide 33: Strengthens Owlet's Position within the Emerging Telehealth Opportunity
...Which Strengthens Owlet’s Position within the Emerging Telehealth Opportunity* Illustrative example of future telehealth potential: As access to doctors becomes more of a commodity within telehealth, we expect that owning the relationship with the customer will be the key differentiator Engagement
Slide 34: The Path to Telehealth and 'Every Baby'
The Path to Telehealth and ‘Every Baby’ 11 Medical MedicalDevices Devices 2 Research 2 Research Telehealth Under development to enable physicians to utilize Sock data when Currently developing two ● Safety & Accuracy deciding if the child is in need of an in-person visit. Physicians may medical vers
Slide 35: Growth Strategy
Growth Strategy 35
Slide 36: Key Opportunities For Growth
4 Key Opportunities For Growth* Penetration Existing products are still in the beginning phases of market 1. with Existing Products penetration in the USA 2. Connected Nursery Owlet plans on expanding our footprint to connect the essential products and services in the nursery Expanding The Ecosystem
Slide 37: Leverage Brand & Distribution to Bring Owlet To More Families
1. Leverage Brand & Distribution to Bring Owlet To More Families Build the Brand Grow Distribution More Value & Premium Positioning Existing Retailers 3.5K 76 NPS(1) doors ~200 doors Future Opportunities ~3,000+ doors 722 doors 599 doors 5K additional doors 2016-2020 2021-2022 2023+ ________________
Slide 38: Expand the Owlet Ecosystem
2. Expand the Owlet Ecosystem Platform + Sleep + Data + Nursing + Labor + Telehealth Storage 2020 2021E 2022E 2023E 2024E 2025E Total LTV $547 $914 $1,328 $1,727 $2,456 $3,296 CAC $30 $28 $27 $25 $24 $22 Ecosystem Band* Smart Nursery Consumables ____________________ * Could require FDA marketing aut
Slide 39: Telehealth and Medical Devices
3. Telehealth and Medical Devices* 1 BabySat 2 OTC Sock 3 Telehealth Building credibility and Expanded claims could Designed to make care opening up a new market lead to deeper penetration easier for parents ● First pulse oximeter designed for ● Designed to utilize telehealth ● Designed to be conven
Slide 40: International Expansion to Europe, Asia & LATAM by 2025
4. International Expansion to Europe, Asia & LATAM by 2025(1) Europe 2021 30M USA 2015 Children 25M Asia 2022 Children 97M Children LATAM 2024 60M ● 47% of Chinese consumers prefer imported brands for safety reasons(2) Children ● 22% ’15-’19 CAGR on the baby care market in China(2) _________________
Slide 41: Leading to a Large & Growing TAM for Owlet's Products
Leading to a Large & Growing TAM for Owlet’s Products 2021 Parenting TAM 2023 Parenting TAM 2025 Parenting TAM ~$23B(1) ~$49B(1)(2) ~$81B(1)(2)(3) $81B $49B TAM Growing at 37% $23B CAGR through 2025 ____________________ Source: Company provided materials, Centers for Disease Control and Prevention (
Slide 42: Expanding Product Portfolio Leads to Strong LTV/CAC Performance
Expanding Owlet’s Product Portfolio and Early Customer Acquisition Leads to Strong LTV/CAC Performance Over Time x x x x x x x ____________________ Source: (1) Utilizes LTV data from TAM assessment 42
Slide 43: Strong Financial Performance
Strong Financial Performance 43
Slide 44: Drivers of Profitability and Long-Term Model
Drivers of Profitability and Long-Term Model 2019A 2020E 2021E 2022E 2023E 2024E 2025E 1 Net Revenue(1) $49.8M $75.2M $107.2M $174.7M $316.4M $581.4M $1,064.5M 2 YoY Growth - 51.0% 42.6% 62.9% 81.1% 83.8% 83.1% 3 Gross Margin 46.0% 47.5% 53.7% 54.7% 55.4% 56.3% 56.3% 4 EBITDA Margin (32.8%) (11.3%)
Slide 45: Use of Funds
Use of Funds Funds expected to be invested over 24-36 months Anticipated SPAC net proceeds* 195.0M Anticipated PIPE gross proceeds 130.0M ● Clinical Research ● Connected Nursery TOTAL 325.0M ● Software & Services Platform ● Acquisitions Total Identified Use of Funds 145.5M ● Customer acquisition/pen
Slide 46: Attractive Business Model
Attractive Business Model 0.06% 1.31% Large Market with Room To Grow 2025E TAM 2019A TAM Penetration Penetration(1) Powerful Competitive Moats: <1/50 4T Data, Brand, & Tech SS false alarm rate vs. without Heartbeats monitored since accelerometry & AI innovations(2) inception(2) Visible and Robust Pi
Slide 47: Cuts Across Several Highly Attractive Comparable Universes
Cuts Across Several Highly Attractive Comparable Universes… Peers Rationale / • Data-enabled technologies to help guide the patient journey Digital Health / Medtech • Innovation focused on improving user experience • Attractive margin profile • Unrelenting focus on user experience as a primary drive
Slide 48: And Is a Financial Outlier
…And Is a Financial Outlier Owlet’s Topline Growth Potential Combined with Its Margin Profile Put It in a League of Its Own Relative to Its Peer Set Comprised of Best-in-class Players in Respective Categories Long term Plan Digital Health / Medtech CY2020E – CY2022E Revenue CAGR 80.0% ’24E-’25E Net
Slide 49: Operational Benchmarking
Operational Benchmarking CY2020E — CY2022E Revenue CAGR Median: 27.7% Median: 30.1% Median: 30.3% 524% 45.4% 39.896 46.3% 46.0% 27.7% T% 7% Teladec j ‘ Owlet Sinspre — edesy FX Damwell —GNino 3B. EARGO himsshers @ mec feet @ CY2019A - CY2021E Revenue Growth 115.3% 105.0% 169.0% 60.8% NM 27.7% NM 162
Slide 50: Putting Valuation in Context
Putting Valuation in Context FV / CY2022E Revenue 3.3x 6.3x 10.0x 11.4x 13.5x 19.6x 25.6x 3.0x 5.0x 7.0x 9.0x 11.0x 13.0x 15.0x 17.0x 19.0x 21.0x+ 6.1x 8.8x 12.0x 13.8x 17.2x 20.1x / FV / Growth Adjusted CY2022E Revenue(1) / 0.10x 0.18x 0.39x 0.45x 0.62x 0.69x 0.75x 1.23x 0.1x 0.2x 0.3x 0.4x 0.5x 0.
Slide 51: Valuation Benchmarking
Valuation Benchmarking Digital Health / Medtech Disruptive Consumer Tech / Health & Wellness High Growth Consumer FV / CY2021E Revenue 35.0x Median: 21.2x Median: 14.6x Median: 14.5x 25.5x 21.2x 18.6x 25.8X 13.2x 17.6x 15.5x 14.5x 11.7x 6.6x 4.2x / FV / CY2021E Growth Adjusted Revenue(1) FV / CY2022
Slide 52: Questions?
Questions? 52
Slide 53: Competition
Competition Category Big Tech Category New Startups Example Example Facebook, Amazon, Google, Apple RayBaby, Miku, Snoo, Nanit, Barriers to Barriers to • Low penetration • Little brand value in baby industry entry entry • Don’t track oxygen levels • Baby is a niche category • Not ecosystem focused C
Slide 54: 'Compelling Anchors' Are the Ecosystem Engines
‘Compelling Anchors’ Are the Ecosystem Engines Apple iPhone – A “Must-Have” Product for an Integrated Environment Owlet Smart Sock – A “Must-Have” Product for an Integrated Nursery 2005 Global Mobile Phone TAM: 2019 Global Smart Phone TAM: 2021 Global Parenting TAM: 2025 Global Parenting TAM: ~$120B
Slide 55: Clinical and Consumer Efforts Have Synergistic Effects
Clinical and Consumer Efforts Have Synergistic Effects 2016-2019 Example Smart Sock: Solve Compelling Problems “Know your baby is okay” 5% Adoption Deepen Penetration & Create Ecosystem Anchor Create the ‘Smart Baby Monitor’ Category Introduce the Introduce New Products Growing LTV and TAM Owlet Cam W
Slide 56: Solutions Portfolio
Developing a Full Solution Approach to Improving the Parenting Journey Conception full stack cohesive solutions throughout the parenting journey Kindergarten Sickness Scenario* Telehealth & Services ● Telehealth Integration* “ER visits are pricey, we have ● Sleep Coaching pediatricians ready to look
Slide 57: Multi-Pronged Strategy to Drive Growth and Create Value
Multi-Pronged Strategy to Drive Growth and Create Value Execute on Acquisitions Leverage Brand and Competitive Moat to Expand Into New Markets Further Develop Services Offering Launch Pediatric Healthcare Devices Drive Organic Growth • Make targeted • Target Telehealth TAM by acquisitions that are l
Slide 58: Designing an Expanded Ecosystem
Designing an Expanded Ecosystem Smart Sock Plus Dream Lab ● Designed to monitor heart rate and oxygen ● Interactive sleep program ● View from app ● Help any healthy baby sleep better ● Version for children 18 months to 5 years old ● Customized, step-by-step plan ● Historical data and insights ● Auto
Slide 59: Innovations Across the Entire Technology Stack
Innovations Across the Entire Technology Stack Enhance Accuracy and User Experience While Limiting Competition Key Innovations: Owlet’s Tech Stack 1. Fabric: Custom 3D knit seamless fabrics that conform to the body to enhance readings without Fabrics compromising comfort. Ultra thin electrode sensor
Slide 60: Future Product Opportunities - Room to Grow
Future Product Opportunities - Room to Grow Product Grid Clinical OTC Sock* Thermometer* In Market BabySat* Opportunistic Gen 2 Near Future Screenings* BabySat* Wearable Thermometer* Long Term Sickness Telehealth* Fertility Fertility Scale Subscript Course Tracker ion / Software Problem Sickness Hum
Slide 61: Strengthening the Customer Relationship in Toddlerhood
Strengthening the Customer Relationship in Toddlerhood Birth Kindergarten Owlet Cam Smart Sock Plus Soothe Key Pipeline Products in Extending to Dream Lab Kindergarten Humidifier Thermometer CO Detector Behavioral Course 1) Cam 2) Smart Sock Plus 3) Soothe Most parents continue to use cameras in the
Slide 62: Owlet Targets Three Primary Customer Segments
Owlet Targets Three Primary Customer Segments ◼ A Millennial parent who is a first-time expecting parent, a parent with a first-time newborn, or a repeat parent ◼ 25 – 45 years old Owlet’s target ◼ $50k+ income customer is: ◼ More tech savvy than average parent First-Time Expecting Parents First-Tim
Slide 63: Multi-Channel Brand and Marketing Strategy
Multi-Channel Brand and Marketing Strategy Drive growth through multi-channel Brand Multi-Channel Sales Growth sales and marketing: • Influencers / Mavens / KOLs ▪ Establish Owlet as a premier brand amongst millennial parents • PR / bloggers • E-commerce expansion globally • Brand evolution • More r
Slide 64: Multi-Channel Distribution Strategy
Multi-Channel Distribution Strategy Strong Existing Retailer and Online Distribution Strategy Opportunities for Distribution Growth Existing Retailers Retailer Opportunities Online ~3,000+ doors In-store 2021 722 doors Boutiques ~200 doors Product Availability ⁽¹⁾ Order Pipeline Smart Sock Duo In-St
Slide 65: Retail Dominance Enables Future Product Placement
Retail Dominance Enables Future Product Placement Strong Product Placement Pipeline for Future Products Buy Buy Baby Racetrack Owlet has earned premium placement in-store through strong sales performance and high brand affinity. As we bring integrated products to market, we expect to continue to have
Slide 66: COVID-19 Impacts
COVID-19 Impacts 1 Company Has Adapted to Unprecedented Environment ● COVID-19 has not negatively affected operations in a material way ● The majority of the workforce is currently working from home and the business has proven that operations can continue without being in the office 2 Flexible Supply
Slide 67: Future Clinical Opportunities
--Appendix-- Future Clinical Opportunities: Medical Devices and ‘Every Baby’ Strategy 67
Slide 68: Owlet is Developing Two Medical Devices: OTC Sock BabySat
Owlet is Developing Two Medical Devices: OTC Sock BabySat Expanded claims could lead to deeper Building credibility and opening up penetration a new market ● Medical device under development that is designed to be sold over the counter at retailers like Target or Walmart similar to a ● Designed to b
Slide 69: Medical Devices
Medical Devices OTC Sock BabySat ‘Sick Baby’ Market ‘Healthy Baby’ Market (1) ($317M)(2) BabySat Gen 2 Is designed for OTC Sock The OTC Sock is under expanded indications for use to enable monitoring for more situations (application for $317M development to support health related claims and credibil
Slide 70: Positioned to Excel in Medical Category
Positioned to Excel in Medical Category Owlet BabySat FDA-cleared Pulse Oximeters (subject to FDA marketing authorization) Designed to be: ✔ Wireless × Wired ✔ Easy-to-use technology × Cumbersome interface ✔ Comfortable for baby × Limits baby’s range of motion ✔ Intuitive app × Analog format ✔ Conti
Slide 71: Current and Upcoming Research
Current and Upcoming Research Research Timeline Research around monitoring is limited. Over 20 years ago, researchers in the CHIME study tested pulse oximetry as a way to identify SIDS cases. They found that the “efficacy of such devices for this use is unproven.” Given that traditional pulse oximetr
Slide 72: Risk Factors
Risk Factors 1. 10. 1 12, 13, 14, 15. 16. 17. 18. 19. We have a limited operating history and have grown significantly in a short period of time. We will need to continue to increase the size of our organization and, if we fail to manage our growth effectively, our business could be materially and a