Priyadarshan Balasundaram

Startup year 2016 Balance Sheet Check 2017 2018 2019 2020 2021 Terminal year 2022 OK OK OK OK OK OK OK 0 10,000 30,000 20,000 60,000 5,000 50,000 20,000 10,000 85,000 41.7% 10,000 100,000 10,000 5,000 125,000 47.1% 20,000 130,000 10,000 5,000 165,000 32.0% 30,000 155,000 10,000 5,000 200,000 21.2% 50,000 170,000 10,000 5,000 235,000 17.5% 60,000 180,000 10,000 5,000 255,000 8.5% 0 120,000 360,000 240,000 720,000 60,000 600,000 240,000 120,000 1,020,000 120,000 1,200,000 120,000 60,000 1,500,000 240,000 1,560,000 120,000 60,000 1,980,000 360,000 1,860,000 120,000 60,000 2,400,000 600,000 2,040,000 120,000 60,000 2,820,000 720,000 2,160,000 120,000 60,000 3,060,000 Conversion Rates Email Organic Search Paid Search Affiliates Total Monthly Visits 6.0% 2.0% 2.2% 4.0% 2.8% 6.0% 2.0% 2.2% 4.0% 2.5% 6.0% 2.0% 2.2% 4.0% 2.4% 6.0% 2.0% 2.2% 4.0% 2.6% 6.0% 2.0% 2.2% 4.0% 2.7% 6.0% 2.0% 2.2% 4.0% 2.9% 6.0% 2.0% 2.2% 4.0% 3.0% Orders Placed Email Organic Search Paid Search Affiliates Total Orders Placed 0 2,400 7,920 9,600 19,920 3,600 12,000 5,280 4,800 25,680 7,200 24,000 2,640 2,400 36,240 14,400 31,200 2,640 2,400 50,640 21,600 37,200 2,640 2,400 63,840 36,000 40,800 2,640 2,400 81,840 43,200 43,200 2,640 2,400 91,440 Order Details Average item value (gross) # of items per order Average markdown Average promotion/discount Cost of Goods Sold (Gross Product Marin) -% 20% 50% -% 18% 50% -% 15% 50% -% 12% 50% -% 10% 50% -% 8% 50% -% 8% 50% Average Gross order value Average Net order value 275 193 300 216 325 244 350 273 375 300 400 328 425 349 Customers Churn Rate Opening active customer base Plus new customers Subtotal Less churned customers Closing customer base 25% 0 19,920 19,920 4,980 14,940 25% 14,940 22,080 37,020 9,255 27,765 25% 27,765 29,040 56,805 14,201 42,604 25% 42,604 36,240 78,844 19,711 59,133 25% 59,133 42,240 101,373 25,343 76,030 25% 76,030 45,840 121,870 30,467 91,402 25% 91,402 48,240 139,642 34,911 104,732 Marketing Expenses Variable Email (cost per click) Organic Search (cost per click) Paid Search (cost per click) Affiliates (cost per click) Average - - - - - - - - - - - - - - Assumptions Site Traffic (Avg monthly visits) Email Organic Search Paid Search Affiliates Total Monthly Visits Growth Rate Site Traffic (Annual) Email Organic Search Paid Search Affiliates Total Annual Visits Order Fulfilment Variable Freight/shipping per order Labor/handling per order Total 12 Fixed Warehouse rent 150,000 150,000 150,000 250,000 250,000 500,000 500,000 General & Administrative Fixed Office rent Salaries, wages & Benefits Professional fees Other Total 100,000 500,000 100,000 100,000 800,000 100,000 700,000 100,000 100,000 1,000,000 100,000 1,000,000 100,000 200,000 1,400,000 200,000 1,200,000 200,000 200,000 1,800,000 200,000 1,500,000 200,000 400,000 2,300,000 200,000 2,000,000 200,000 400,000 2,800,000 200,000 3,000,000 200,000 400,000 3,800,000 Balance Sheet Items Current Assets Accounts Receivable Days Inventory Days Inventory Turns 5 120 3.0 5 100 3.7 5 90 4.1 5 90 4.1 5 90 4.1 5 90 4.1 5 90 4.1 60 50 40 30 30 30 30 300,000 200,000 0 50,000 50,000 0 50,000 50,000 0 500,000 50,000 0 50,000 200,000 0 1,000,000 100,000 0 100,000 500,000 0 5 5 5 5 5 5 5 5 5 5 5 5 5 5 3.00% 0 8,000,000 0 3.00% 0 0 0 3.00% 0 0 0 3.00% 0 0 0 3.00% 0 0 0 3.00% 0 0 0 3.00% 0 0 0 25% 20% 25% 20% 25% 20% 25% 20% 25% 20% 25% 20% 25% 20% Gross Revenue Discounts, Promotions, Markdowns Net Revenue 5,478,000 (1,643,400) 3,834,600 7,704,000 (2,157,120) 5,546,880 11,778,000 (2,944,500) 8,833,500 17,724,000 (3,899,280) 13,824,720 23,940,000 (4,788,000) 19,152,000 32,736,000 (5,892,480) 26,843,520 38,862,000 (6,995,160) 31,866,840 Cost of Goods Sold Gross Profit Gross Margin 2,739,000 1,095,600 28.6% 3,852,000 1,694,880 30.6% 5,889,000 2,944,500 33.3% 8,862,000 4,962,720 35.9% 11,970,000 7,182,000 37.5% 16,368,000 10,475,520 39.0% 19,431,000 12,435,840 39.0% Variable Operating Expenses Marketing Fulfilment Total Variable Costs Contribution Margin Margin 2,280,000 338,640 2,618,640 (1,523,040) -39.7% 1,380,000 385,200 1,765,200 (70,320) -1.3% 690,000 507,360 1,197,360 1,747,140 19.8% 720,000 708,960 1,428,960 3,533,760 25.6% 720,000 829,920 1,549,920 5,632,080 29.4% 750,000 1,063,920 1,813,920 8,661,600 32.3% 780,000 1,097,280 1,877,280 10,558,560 33.1% Fixed Operating Expenses Fulfilment General & Administrative Total EBITDA Margin 150,000 800,000 950,000 (2,473,040) -64.5% 150,000 1,000,000 1,150,000 (1,220,320) -22.0% 150,000 1,400,000 1,550,000 197,140 2.2% 250,000 1,800,000 2,050,000 1,483,760 10.7% 250,000 2,300,000 2,550,000 3,082,080 16.1% 500,000 2,800,000 3,300,000 5,361,600 20.0% 500,000 3,800,000 4,300,000 6,258,560 19.6% 100,000 120,000 140,000 250,000 300,000 420,000 520,000 365 Current Liabilities Accounts Payable Days Capital Expenditures Technology Development Office Equipment Acquisitions Depreciation Technology - Straight-line Years Office Equipment - Straight-line Years Financing Interest Rate Debt Issued (Repaid) Equity Raised (Repurchased) Dividends Paid Valuation Tax Rate Cost of Capital / Discount Rate Terminal Value Exit Multiple 20% 8.0x Income Statement Depreciation Interest Earnings Before Tax 0 (2,573,040) 0 (1,340,320) 0 57,140 0 1,233,760 0 2,782,080 0 4,941,600 0 5,738,560 Taxes Net Income 0 (2,573,040) 0 (1,340,320) 14,285 42,855 308,440 925,320 695,520 2,086,560 1,235,400 3,706,200 1,434,640 4,303,920 0 0 0 0 0 0 0 4,954,646 52,529 900,493 5,907,668 240,000 160,000 6,307,668 3,344,792 75,985 1,055,342 4,476,119 220,000 160,000 4,856,119 2,992,993 121,007 1,452,082 4,566,082 190,000 150,000 4,906,082 2,886,117 189,380 2,185,151 5,260,647 510,000 130,000 5,900,647 4,448,738 262,356 2,951,507 7,662,601 370,000 220,000 8,252,601 6,668,315 367,719 4,035,945 11,071,979 1,040,000 230,000 12,341,979 10,325,123 436,532 4,791,205 15,552,860 800,000 550,000 16,902,860 880,708 880,-,708 769,479 769,-,479 776,587 776,-,587 845,832 845,-,832 1,111,226 1,111,226 0 1,111,226 1,494,404 1,494,404 0 1,494,404 1,751,365 1,751,365 0 1,751,365 8,000,000 (2,573,040) 5,426,960 6,307,668 8,000,000 (3,913,360) 4,086,640 4,856,119 8,000,000 (3,870,505) 4,129,495 4,906,082 8,000,000 (2,945,185) 5,054,815 5,900,647 8,000,000 (858,625) 7,141,375 8,252,601 8,000,000 2,847,575 10,847,575 12,341,979 8,000,000 7,151,495 15,151,495 16,902,860 Dividends Paid Balance Sheet ASSETS Current Cash Accounts Receivable Inventory Total Technology Property & Equipment Total Assets LIABILITIES & SHAREHOLDER EQUITY Liabilities Current Revolver Accounts Payable Total Debt Total Liabilities Shareholder Equity Share Capital Retained Earnings Total Shareholder Equity Total Liabilities & Shareholder Equity Check 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Cash Flow Statement Cash from Operations Net Income Depreciation Changes in non cash working capital Accounts Receivable Inventory Accounts Payable Total (2,573,040) 100,000 (1,340,320) 120,000 42,855 140,000 925,320 250,000 2,086,560 300,000 3,706,200 420,000 4,303,920 520,000 52,529 900,493 880,708 (2,545,354) 23,456 154,849 (111,228) (1,509,854) 45,022 396,740 7,108 (251,799) 68,373 733,068 69,245 443,124 72,976 766,356 265,394 1,812,621 105,363 1,084,438 383,178 3,319,576 68,813 755,260 256,961 4,256,808 500,-,000 100,-,000 100,-,000 550,-,000 250,-,000 1,100,000 0 1,100,000 600,-,000 Cash from Financing Increase (decrease) in Debt Equity Issued (repurchased) Dividends Paid Total 0 8,000,000 0 8,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Cash 4,954,646 (1,609,854) (351,799) (106,876) 1,562,621 2,219,576 3,656,808 Opening balance Increase (Decrease) Closing balance 0 4,954,646 4,954,646 4,954,646 (1,609,854) 3,344,792 3,344,792 (351,799) 2,992,993 2,992,993 (106,876) 2,886,117 2,886,117 1,562,621 4,448,738 4,448,738 2,219,576 6,668,315 6,668,315 3,656,808 10,325,123 Cash Invested Capital Expenditures Acquisitions Total Supporting Schedules Capital Assets Opening Balance Technology Property & Equipment Total 0 0 0 240,000 160,000 400,000 220,000 160,000 380,000 190,000 150,000 340,000 510,000 130,000 640,000 370,000 220,000 590,000 1,040,000 230,000 1,270,000 Additions Technology Property & Equipment Total 300,000 200,000 500,000 50,000 50,000 100,000 50,000 50,000 100,000 500,000 50,000 550,000 50,000 200,000 250,000 1,000,000 100,000 1,100,000 100,000 500,000 600,000 Subtotal Technology Property & Equipment Total 300,000 200,000 500,000 290,000 210,000 500,000 270,000 210,000 480,000 690,000 200,000 890,000 560,000 330,000 890,000 1,370,000 320,000 1,690,000 1,140,000 730,000 1,870,000 60,000 60,000 10,000 60,000 10,000 10,000 60,000 10,000 10,000 100,000 60,000 10,000 10,000 100,000 10,000 0 10,000 10,000 100,000 10,000 200,000 60,000 70,000 80,000 180,000 190,000 330,000 0 0 10,000 100,000 10,000 200,000 20,000 340,000 40,000 40,000 10,000 40,000 10,000 10,000 40,000 10,000 10,000 10,000 40,000 10,000 10,000 10,000 40,000 0 10,000 10,000 10,000 40,000 20,000 40,000 50,000 60,000 70,000 110,000 90,000 0 0 10,000 10,000 40,000 20,000 100,000 180,000 Total 100,000 120,000 140,000 250,000 300,000 420,000 520,000 Closing Balance Technology Property & Equipment Total 240,000 160,000 400,000 220,000 160,000 380,000 190,000 150,000 340,000 510,000 130,000 640,000 370,000 220,000 590,000 1,040,000 230,000 1,270,000 800,000 550,000 1,350,000 Debt Schedule Opening Balance Debt Issued (Repaid) Closing Balance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Interest on Debt 0 0 0 0 0 0 0 130 137 137 143 143 149 155 Contribution Margin Per Order 38 51 67 84 100 115 124 Customer Lifetime Value (LTV) 152 204 269 336 398 460 496 LTV/CAC Ratio 1.2x 1.5x 2.0x 2.4x 2.8x 3.1x 3.2x Payback (# of orders) 3.4 2.7 2.0 1.7 1.4 1.3 1.2 Depreciation Technology- Subtotal Property & Equipment- Subtotal Customer Metrics Customer Acquisition Cost (CAC) Valuation EBIT (2,573,040) (1,340,320) 57,140 1,233,760 2,782,080 4,941,600 5,738,560 Net Operating Loss Opening Balance Current Loss Sub Total Loss Used Closing Balance 0 2,573,040 2,573,040 0 2,573,040 2,573,040 1,340,320 3,913,360 0 3,913,360 3,913,360 0 3,913,360 57,140 3,856,220 3,856,220 0 3,856,220 1,233,760 2,622,460 2,622,460 0 2,622,460 2,622,460 0 0 0 0 0 0 0 0 0 0 0 Free Cash Flow Earning Before Tax Interest EBIT Less Taxes Less Capex Plus Depreciation Less Changes in Working Capital Unlevered Free Cash Flow (2,573,040) 0 (2,573,-,000 100,000 72,314 (3,045,354) (1,340,320) 0 (1,340,-,000 120,000 289,534 (1,609,854) 57,140 0 57,-,000 140,000 434,654 (337,514) 1,233,760 0 1,233,-,000 250,000 732,196 201,564 2,782,080 0 2,782,080 39,905 250,000 300,000 573,939 2,218,236 4,941,600 0 4,941,600 1,235,400 1,100,000 420,000 806,624 2,219,576 5,738,560 0 5,738,560 1,434,640 600,000 520,000 567,112 3,656,808 5,478,000 28.6% -64.5% 7,704,000 30.6% -22.0% 11,778,000 33.3% 2.2% 17,724,000 35.9% 10.7% 23,940,000 37.5% 16.1% 32,736,000 39.0% 20.0% 38,862,000 39.0% 19.6% Customer Acquisition Cost Life Time Value LTV/CAC -x -x -x -x -x -x -x Customer Acquisition Cost Contribution Margin Payback (# of orders) - - - - - - - (3,045,354) 4,954,646 (1,609,854) 3,344,792 (351,799) 2,992,993 (106,876) 2,886,117 1,562,621 4,448,738 2,219,576 6,668,315 3,656,808 10,325,123 DCF Valuation NPV of Forecast Terminal Value (EBITDA multiple) NPV of Terminal Value Total Enterprise Value 20% 8.0x (1,098,526) 50,068,480 13,973,194 12,874,668 EV/Revenue (2017E) 1.7x % of Business Retained after raise 62% Charts & Graphs Revenue Gross Margin EBITDA Margin Revenue ($ millions) $35 100% Revenue EBITDA Margin Gross Margin $13 Burn Rate Cash Balance $11 75% $9 $25 50% $15 25% $5 0% -$5 -25% Burn ($ millions) $45 8,000,000 MarginMargin Burn Rate Cash Balance $7 $5 $3 $1 -$1 -$3 -$15 -50% 2016 2017 2018 2019 2020 2021 2022 -$5 2016 2017 2018 2019 2020 2021 2022 -50% 2017 2018 2019 2020 2021 Customer Acquisition Cost Contribution Margin Payback (# of orders) $200 $180 $160 2016 5.0 $120 3.0 $100 2.5 $80 2.0 $60 1.5 $40 1.0 $20 0.5 $0 0.0 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 5.0x Customer Acquisition Cost Life Time Value LTV/CAC $500 4.0 3.5 2017 $600 4.5 $140 2016 -$5 2022 4.5x 4.0x 3.5x $400 Payback (# orders) 2016 3.0x $300 2.5x 2.0x $200 1.5x 1.0x $100 0.5x $0 0.0x 2016 2017 2018 2019 2020 2021 2022 LTV/CAC Ratio -$15