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CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
TSX-V: BTV
February 2019
BlueRush Inc. Investor Presentation
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 2
This presentation (the “Presentation”) about BlueRush Inc. (“BlueRush”) is dated as of February 2019. It isinformation in a summary form and does not purport to be complete. It is not intended to be relied upon as adviceto investors or potential investors and does not take into account the investment objectives, financial situation orneeds of any particular investor.
No representation or warranty, express or implied, is made or given by or on behalf of BlueRush or any of itsaffiliates, directors, officers or employees as to the accuracy, completeness or fairness of the information oropinions contained in this Presentation and no responsibility or liability is accepted by any person for suchinformation or opinions. BlueRush does not undertake or agree to update this Presentation or to correct anyinaccuracies in, or omissions from, this Presentation that may become apparent. No person has been authorized togive any information or make any representations other than those contained in this Presentation and, if givenand/or made, such information or representations must not be relied upon as having been so authorized. Thecontents of this Presentation are not to be construed as legal, financial or tax advice.
Certain statements contained in this press release constitute "forward-looking information" as such term is definedin applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek","intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to BlueRush, areintended to identify forward-looking information. All statements other than statements of historical fact may beforward-looking information. Such statements reflect BlueRush's current views and intentions with respect to futureevents, and current information available to BlueRush, and are subject to certain risks, uncertainties andassumptions. Many factors could cause the actual results, performance or achievements that may be expressed orimplied by such forward-looking information to vary from those described herein should one or more of these risksor uncertainties materialize. Examples of such risk factors include, without limitation: changes in law, large increasein competitors, litigation, the ability to implement business strategies and pursue business opportunities, state ofthe capital markets, future capital requirements, the availability of funds and resources to pursue operations, newtechnologies, the ability to protect intellectual property rights, the ability to obtain patent protection for products,third-party intellectual property infringement claims, regulatory changes affecting products, failing research anddevelopment activities, the ability to reach and sustain profitability, dependence on business and technical experts,the ability to effectively manage business operations and growth, issuance of debt, dilution of existing securities,volatility of publicly traded securities, potential conflicts of interest, unlikelihood of dividend payments, thepotential costs stemming from defending third-party intellectual property infringement claims, the ability to securerelationships with suppliers and customers, dependence on key management and employees, as well as generaleconomic, market and business conditions, as well as those risk factors discussed or referred to in BlueRush’sdocuments filed with the securities regulatory authorities in certain provinces of Canada and available atwww.sedar.com.
Should any factor affect BlueRush in an unexpected manner, or should assumptions underlying the forward-lookinginformation prove incorrect, the actual results or events may differ materially from the results or events predicted.Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover,BlueRush does not assume responsibility for the accuracy or completeness of such forward-looking information. Theforward-looking information included in this press release is made as of the date of this press release and BlueRushundertakes no obligation to publicly update or revise any forward- looking information, other than as required byapplicable law.
By your acceptance of this presentation you and any person reviewing this Presentation agrees not to distribute,copy; reproduce; transmit; make available; or condone any of the foregoing, without the prior written consent ofBlueRush. Any unauthorized use of this Presentation is strictly prohibited.
This Presentation does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any saleof the securities of BlueRush in any jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of such jurisdiction. The securities of BlueRush have not beenand will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), orany state securities laws and may not be offered or sold within the United States, unless an exemption from suchregistration is available, information concerning the assets and operations of BlueRush included in this Presentationhas been prepared in accordance with Canadian standards and is not comparable in all respects to similarinformation for United States companies.
Recipients of this Presentation who are considering acquiring securities of BlueRush are referred to the entire bodyof publicly disclosed information regarding BlueRush. The information is subject to material updating, revision andfurther amendment, and is qualified entirely by reference to BlueRush’s publicly disclosed information.
Disclaimer
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 3
Information Overload• People are inundated, attention
spans are limited • 6 second ads are not the answer• The problem is not going away
Personalized VideoWith interactive and personalized video we are able to achieve superior and quantifiable levels of engagement, which drives meaningful business results.
The Problem The Solution
The Problem BlueRush Solves:Customer Engagement
Attention Spans• The average attention span in the year:
• 2000 – 12 seconds• 2015 – 8.25 seconds
• The average attention span of a goldfish is 9 seconds!
Recent BlueRush Case StudyAs part of a pension fund personalized video project, the average viewer was engaged for 75 seconds.
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
Of viewers clicked CTA
+30%Lift in
conversions
+40%
Mortgage Affordability IndiVideo for
one of Canada’s “Big Six” Banks
IndiVideo Case Studies
4
ObjectiveEngage and educate AFP Habitat’s 2,000,000+ clients to increase pension account openings and contributions
Of visitors watched >60 seconds of video
+70%
ObjectiveImprove conversion performance of client’s mortgage affordability calculator
Satisfaction rating
+90%
AFP Habitat Pension Statement IndiVideo
These successful customer results led to record business activity in Q1 2019 in terms of SaaS revenue, deferred revenue and total billings
Watched entire IndiVideo
+70%Increase in
account openings and contributions
+250%
WATCH THE VIDEO
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
B2C Video Marketing Opportunity
• Video is 69% of all Internet traffic, and is projected to grow to 80% by 2021 (Cisco 2017)
• In 2018, 2.4 billion people consumed video content, of which 78% was viewed on mobile (eMarketer 2018)
• 95% of consumers watch video to understand products/services (HubSpot 2018)
• 96% of marketers plan to maintain or increase investment in personalization in 2019 (Evergage 2018)
5
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
US $22Video advertising market by 2021
Video Marketing Landscape
BILLION
IndiVideo’s Current Addressable Financial Institution Market (for Tier 1, 2, and 3 financial institutions in North America with AUM of at least US$2 billion):
~US $450Total
~US $4510% Market Share
MILLION in ARR MILLION in ARR
6
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 7
• Public since 2004, the Company’s history is primarily providing one-time digital media services
• Commenced transition to SaaS model in late 2017 with appointment of CEO Steve Taylor
• Revitalized: new SaaS strategy
• Recapitalized: fresh capital
• Restructured: new leadership team
• Fiscal 2018 revenue: $3.0 million
Founded in 2003, based in Toronto
Growth-stage venture capital firm investing in Canadian information technology companies including:
• Lavalife, Skywave, FloNetwork, Softimage, Fortiva
• Hubdoc: exit to Xero for ~$100M (July 2018)
Round13 provides guidance for:
• Strategic planning
• Sales & marketing
Own ~38% of BlueRush Inc. after initial investment and exercise of warrants (2018)
Lead Investor
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
Management
Steve Taylor / CEO, Director; 2017
Strong track record leading emerging, high-growth companies:
• SaaS-based compliance: 2002-2015 (Exit to Klass Capital)
• Mobile: 2005-2012 (Split company in two, resulting in sale of both)
• E-commerce: 1995-2001 (IPO)
Larry Lubin /President, Co-Founder, Chair; 2003
Richard Pineault /VP Tech; 2008
Dave Badun, CPA, CA /CFO; 2018
Jeff Bilyea /COO; 2018
Ted Mercer /VP Sales; 2018
Len Smofsky /EVP, Co-Founder; 2003
8
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
Verticals
• Financial institutions
• Insurance
• Telecommunications
• Utilities
• E-commerce
• Healthcare
• Cannabis
Applications
• Billing & statements
• Customer care
• Customer engagement
• AdTech
• Proxies
Creates a memorable customer experience, simplifying complex products and ensuring immediate relevancy.
The platform’s data-driven video content seamlessly fits into existing marketing infrastructure to accelerate the buyer journey. IndiVideo cost-effectively scales with no compromise to data security.
Content engagement platform that aligns sales, marketing, and compliance. The platform facilitates the centralization, personalization, distribution and associated tracking of customer-centric content.
DigitalReach empowers personalized client communications, ensuring a seamless digital experience and emotional brand connection.
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V
What is IndiVideo?
WATCH VIDEO
What is DigitalReach?
WATCH VIDEO
9
Our Products
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 10
Focus on increasing predictable recurring revenue through
higher direct & partner sales and document composition
opportunities in 2019.
Business Growth
CEO identified prime products with SaaS ability, thus altering the business
from one-time services revenue to recurring revenue model.
Transformation to SaaS
2017
Re-positioning for Growth
Sourced quality leads moving pipeline from $1M (Oct’17) to $5M (today)
including 75 IndiVideo deals.Greenfield: 70/75 non-competitive.
Growing Sales Pipeline
Power BI Integrated for data capture & reporting Work on IndiVideo 'as a platform’
begins Integration with DigitalReachAI strategy developed
Product Development
BlueRush continues to strengthen its executive team (CFO, COO) while
acquiring A-level talent within sales & development.
Strengthened Team
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 11
(S. America) (UK & Europe)
Blue Chip Customers Strategic Partners
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 121 Fiscal years ended July 31
$ Millions except percentages and per share amounts Fiscal 2018 Fiscal 2017
Revenues
Subscriptions & Support $1.0 $1.0
Services $2.0 $2.2
Total Revenue $3.0 $3.3
Cost of Sales
Subscriptions & Support $0.4 $0.6
Services $1.1 $1.3
Total Cost of Sales $1.5 $1.9
Gross Profit $1.5 $1.4
SaaS Gross Margin 61% 44%
Services Gross Margin 44% 42%
Net Loss ($3.3) ($1.6)
Per Share (basic & diluted) ($0.06) ($0.05)
Fiscal 2018 Performance Reflects Repositioning
BlueRush’s transition to SaaS model drove strong financial performance in fiscal 2018
$0.45M
$0.63M
Fiscal 2017 Fiscal 2018
SaaS Gross Margin1
($)
44%
61%
Fiscal 2017 Fiscal 2018
SaaS Gross Margin1
(% of SaaS Revenue)
Gross margin growth in SaaS business attributable to:
Optimized Company structure by moving to the Microsoft Azure cloud platform.
Successful R&D investments in IndiVideo and DigitalReach.
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 131 Quarters ended October 31
$0.14M
$0.18M
Q1 2018 Q1 2019
SaaS Gross Margin1
($)
61%67%
Q1 2018 Q1 2019
SaaS Gross Margin1
(% of SaaS Revenue)
$ Millions except percentages and per share amounts Q1 2019 Q1 2018
Revenues
Subscriptions & Support $0.3 $0.2
Services $0.6 $0.5
Total Revenue $0.9 $0.7
Cost of Sales
Subscriptions & Support $0.1 $0.1
Services $0.4 $0.2
Total Cost of Sales $0.4 $0.3
Gross Profit $0.43 $0.42
SaaS Gross Margin 67% 61%
Services Gross Margin 41% 59%
Net Loss ($0.9) ($0.3)
Per Share (basic & diluted) ($0.01) ($0.01)
Continued SaaS Growth in Q1 2019
26%
Services revenue grew
17%
SaaS revenue increased
Further SaaS and Services revenues due to increased sales activity while margin growth continued as a result of product enhancements and shift to Microsoft Azure platform.
$2 million
Strengthened liquidity with
non-brokered private placement of convertible debentures.
Record business activity in the quarter
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 14
Investment Summary
• CEO Steve Taylor, lead investor Round13 Capital both have track records of value creation
Strong Management and Lead Investor
2
• Clients include leading banks, insurance and asset management firms
• Partners drive global footprint and accelerate technical roadmap
Blue Chip Customers and Strategic Partners
4
• Highly scalable, personalized and customized SaaS solution
• Disruptive delivery and pricing model
• Superior gross margins
IndiVideo is a Superior Product
3
• Video is the fastest-growing online medium
• Epidemic engagement problem
Large and Growing Market Opportunity
1
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 15
Appendix
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 16
Paul SmithCurrently the Chief Executive Officer and Director of Frontline Broadband Inc., a private telecommunications and information technology service provider in Canada. Paul was Chair of VIA Rail Canada Inc.’s board of directors from 2010 to 2014 after having joined the board in September 2006. Prior to that, Paul was President & Chief Executive Officer of Equity Financial Holdings Inc., a TSX listed issuer, and a Canadian financial services firm he co-founded whose principal subsidiary is an OSFI-regulated deposit-taking institution. Paul is a director of several companies and, before joining the private sector, served as Executive Assistant to the Prime Minister of Canada.
Larry Lubin, ChairAs original founder, Chairman and CEO of Fitech, now part of CGI, Larry began innovating in sales, software development, and financial services early on. Many leading applications for financial institutions including the Reality Check™ series for Scotiabank were developed by Larry and his Fitech team. In September of 2003, he co-founded BlueRush. His vision of an optimized and fully integrated sales and customer experience that leverages the power of technology is at the heart of all BlueRush products.
Steve TaylorMore than 25 years' experience driving profitable growth in the Enterprise SaaS, eCommerce and Digital Media industries. Steve is the former CEO and founder of Resolver Inc., a SaaS-based governance, risk and compliance company that was successfully sold to Klass Capital in 2015. Steve joined as Director of BlueRush in 2017 and successfully closed a non-brokered private placement with Round13 Capital. Shortly thereafter he was appointed CEO of the Company.
John EckertJohn is a co-founder of the Canadian venture capital firm Round13 Capital and is a co-founder and former managing partner of McLean Watson Capital. Round13 manages $200 million in funds focused on growth-stage technology opportunities. John has been a professional venture capitalist for over 25 years and has invested in over 40 technology companies. He has backed many of Canada's most successful technology companies including Softimage, FloNetwork, Fortiva, Lavalife, i4i, Skywave and Hubdoc.
Mike BeckermanMost recently Mike was CEO of North American marketing agencies Ariad Communications and Bluespire Marketing. Ariad is an agency specializing in branding and online communications. Prior to this, Mike was the Chief Marketing Officer for Bank of Montreal. He led the development of new brand identities for both its Canadian and U.S. operations which involved more than 1,000 retail locations and over 30,000 employees. Prior to Bank of Montreal, Mike was the Vice President, Marketing for Canadian Airlines after having served over a decade with Nike in various roles and countries around the world.
Board of Directors
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 17
Company Name Headquarters Investors Investment Raised
New YorkComcast Ventures, Viola Growth, Norwest Ventures
US$74M
New York Marker ~US$10M
KitchenerBattery Ventures, Bessemer Venture, OMERS Ventures
US$61M
Toronto Round13 CAD$2.6M
Competitors
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 18
Share Price (Moving 50 Day Average)
$ 0.11Options
11,255,000
Warrants
6,550,018
S/O Basic
75,251,848
52 Week Range
$0.075 - $0.20
Fully Diluted Figure
112,104,485
Stock Data
As at January 14, 2019
Market Cap$7.9M
Convertible Debenture
19,047,619** Assumes conversion at $0.105. The company has ability to invite debenture holders to convert at $0.105 if after October 31, 2019 the shares have been trading for 20 consecutive days at $0.25 or greater. Should the holder wish not to convert at that time, the conversion changes to $0.15.
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 19
Less IT engagement required
Lower implementation costs
Monthly fees spread over life of contract
Ability to flex between operating versus capital expenditure budgets
Predictable, stackable revenues
Superior operating model (support, upgrades…)
Robust gross margins that improve over time
Stronger trading multiple relative to services
Conceptual IndiVideo Example of SaaS Margin Potential
SaaS is a superior operating model
Customer Benefits Benefits for SaaS Provider
Win SaaS deal US $60,000annually
Initial product development cost: US $20,000
Minimal return in first 3-4 months
~60%-70% gross margin in first 12 months
~80%-95% gross margin beginning in year 2
CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 20
Key IndiVideo Elements
ScalabilityAbility to produce one or millions of videos
High gross margins: minimal COGS increase
Pricing: flat monthly fee
Hybrid Creative StrategyBuilds video content or incorporates from outside agencies
Data CaptureLoop back to support company objectives and customer insights
Traction With Existing/New Client Base + Partners
CustomersTop-tier customer base in multiple verticals across Canada, USA, South America & Europe
PartnersExcellent distribution partners in financial, bill statement, insurance, software and other industries across Canada, UK and South America
Competitive Strengths