TRANSFERWISE DISRUPT OR DISRUPTED Asper Consulting Group Emily

TRANSFERWISE: DISRUPT OR DISRUPTED? Asper Consulting Group Emily Sanders Matt Borgford Tanis Brako Carlos Kan Presenting to: Mr. Kristo Kaarmann & Taavet Hinrikus, Co-founders

KEY ISSUE How does Transfer. Wise scale it’s business sustainably into the future? Introduction Analysis Alternatives Implementation Risks Conclusion

CORE CHALLENGES Business Model Financial Security • Reliant partnerships • Scalability • Internal Capability • Unbalanced liquidity • Unsustainab le acquisition cost Introduction Analysis Alternatives Reputation • Recent glitch • Comparative advertising Implementation Risks Conclusion

RECOMMENDATION Innovate business model through advertising revenue & new technology Introduction Analysis Alternatives Implementation Risks Conclusion

STRATEGIC OBJECTIVES Zero Fees Achieve within 10 years Sustainability Create Brand Excitement Introduction Analysis Alternatives Financial, profitability Increase user base Implementation Risks Conclusion

TRANSFERWISE Price “ Delight users and ” eliminate inefficiencies in the existing money transfer ecosystem. Introduction Analysis Alternatives Convenien ce Trust Coverage Implementation Speed Risks Conclusion

CORE COMPETENCIES Cost Effective transferring of funds across international borders Financial Technology Transfer. Wise needs to leverage core competencies to fuel growth Introduction Analysis Alternatives Implementation Risks Conclusion

REVENUE AND PROFITABILITY Revenue (in millions) 78% of revenue from Europe Net Profit margin % 160 10% 5% 97 151 2017 2018 140 120 100 80 60 40 20 0 -69% Profitability % 48 2016 Introduction Analysis Alternatives Implementation Risks 20% 10% 0% -10% -20% -30% -40% -50% -60% -70% -80% Conclusion

TRANSFERWISE ENVIRONMENT Competition French Groupe BPCE Western Union • Market leader in money remittance services by revenue • Low fees for India and Mexico • Wide reach • Quick transfers Introduction Analysis Partnerships Alternatives • Can use Transfer. Wise directly through App Bank of England • Permission to use realtime gross settlement account Startups • N 26 • LHV Implementation Risks Conclusion

CONSUMER Low Fees Outflow Country • New entrants sending money home • Students living abroad • Low/mid income level Accessibilit y Convenien ce What do they value? Inflow Country Quick Transfers • Receiving funds • Low/mid income level Security The consumer drives the need for Transfer. Wise Introduction Analysis Alternatives Implementation Risks Conclusion

KEY COUNTRIES (US BILLION$) Migrant Remittance 2013 Outflows 2014 2015 2016 United States 56 59 63 67 Saudi Arabia 35 37 39 38 Switzerland 25 26 26 26 Germany 20 21 29 21 Migrant Remittance 2013 Inflows 2014 2015 2016 India 70 70 69 63 China 59 62 64 61 Philippines 27 29 30 31 Mexico 23 25 26 29 Alternatives Implementation Risks Introduction Analysis Conclusion

KEY COUNTRIES (US BILLION$) Migrant Remittance 2013 Outflows 2014 2015 2016 United States 56 59 63 67 Saudi Arabia 35 37 39 38 Switzerland 25 26 26 26 Germany 20 21 29 21 Migrant Remittance 2013 Inflows 2014 2015 2016 India 70 70 69 63 China 59 62 64 61 Philippines 27 29 30 31 Mexico 23 25 26 29 There is opportunity in United States, Philippines, and Mexico Introduction Analysis Alternatives Implementation Risks Conclusion

MARKET TRENDS Increase in App usage Agility of tech startups Disruptive models Transfer. Wise needs to be innovative and agile to grow Introduction Analysis Alternatives Implementation Risks Conclusion

ENVIRONMENTAL ANALYSIS • Easy to use • Quick transfers • Low fees (10 -20 times) • Adoption of tech • Consumer Trends Introduction Analysis Strength Opportunit y Alternatives Challenge Threat Implementation • Reputation of partnerships • Inexperienced leadership • Recent PR issues • Low fees at banks • Partnership sustainability • Emergence of fintech startups Risks Conclusion

ALTERNATIVES Differentiate to related services Introduction Analysis Launch Digital Bank Alternatives Implementation Innovate through new technology & revenue stream Risks Conclusion

ALTERNATIVE 1 Differentiate to Related Services Differentiate to related services from the customers perspective. Ex: social media/ chat functionality Pro Strength Customer engagemen t Scale Introduction Analysis Alternatives Con Implementation Cost Competition Risks Conclusion

ALTERNATIVE 2 Launch Digital Bank Pro Innovate through the value chain by launching a digital bank. Ex: Tangerine Introduction Analysis Alternatives Con Relationshi p Dependenc y Regulation Convenien ce Strengths Implementation Risks Conclusion

ALTERNATIVE 3 Innovate through New Technology & Revenue Streams Innovate through the adoption of new technology and expanding to new revenue streams. Ex: adopt blockchain and advertising revenue Introduction Analysis Alternatives Pro Con Trends Revenue Alignment Implementation Focus Change Manageme nt Risks Conclusion

DECISION CRITERIA Growth Scale the business by increasing the user base Ensure financial sustainability of the company Core Competenci es Sustainabilit y Maintain strong customer satisfaction ratings Introduction Analysis Play to strengths Customer Satisfaction Alternatives Implementation Risks Conclusion

DECISION CRITERIA Differentiate to Related Services Launch Digital Bank Diversify through ad revenue & New Tech Growth Scale the business Core Competencies Play to strengths Customer Satisfaction Maintain strong rating Sustainability Ensure financial sustainability Introduction Analysis Alternatives Implementation Risks Conclusion

FUTURE FORWARD Leading Financial remittance company in the world Innovate business model through advertising revenue & new technology Zero Fee Brand Excitement Financial Sustainability Introduction Analysis Alternatives Implementation Risks Conclusion

IMPLEMENTATION • Banking partnerships • Reach new customers Drive Growth Introduction Analysis Innovation • Security Consideratio ns • New emerging technologies Alternatives • Invest in IT • Banking Partners Implementation Instill Trust Risks Conclusion

DRIVE GROWTH – CONSUMER AWARENESS Demographic New Entrants Students Public Value Low fees, trust Convenience Accessibility Campaign Location: Mexico & Phillippines Signage in Embassies to create relationship before moving to new country Guerilla Marketing: Continue: College Football SEO, Social Media (Soccer) game Digital Word of Mouth “Surprise & Delight” representatives at game Free Drink Tickets Social Media #Transfer. Wire Targeting the consumers that require this Promotion service is key to growing Transfer. Wire Introduction Analysis Alternatives Implementation Risks Conclusion

DRIVE GROWTH - NATURAL AFFILIATIONS Mexico USA • Large need for money transfers • Develop bank partnership • Growing outflow of money transfers • Develop bank partnership • Bank of America Leverage existing natural affiliations and growth of money transfers to drive growth Introduction Analysis Alternatives Implementation Risks Conclusion

DRIVE GROWTH - NATURAL AFFILIATIONS Phillippines • Large need for money transfers • Develop bank partnership Canada • Growing outflow of money transfers • Develop bank partnership • Scotiabank Leverage existing natural affiliations and growth of money transfers to drive growth Introduction Analysis Alternatives Implementation Risks Conclusion

INNOVATION – CREATE HUB WITHIN TRANSFERWIRE Optimize Business Model • Use AI to optimize money pools IT Development Security • Continually improve the platform • Digital fingerprints Blockchain • Invest in research to incorporate technology Invest in people to adapt to technology trends and instill trust by creating a reliable service Introduction Analysis Alternatives Implementation Risks Conclusion

DRIVE GROWTH Product Price Place • Quick transfers • Ease of use • Lower fees by incorporating new partnerships • Offer incentives using Artificial Intelligence (optimize money pools) • • Facebook and Instagram Banks where partnership exists Scooters/mopeds in Mexico and Phillippines Cars for Canada & US Ensure the platform is accessible to the target consumer Introduction Analysis Alternatives Implementation Risks Conclusion

INTERNAL – HR REQUIREMENTS Innovation Hub • 1 Research Scientist Businesses Expansion • Advertise on Transfer. Wire Platform • 5 staff • US, Mexico Office • Canada & Phillippines Office • 5 staff each • Natural growth Invest in people to adapt to technology trends and instill trust by creating a reliable service Introduction Analysis Alternatives Implementation Risks Conclusion

IMPLEMENTATION TIMELINE Introduction Analysis Alternatives Implementation Risks Conclusion

COST OF IMPLEMENTATION Introduction Analysis Alternatives Implementation Risks Conclusion

CUSTOMER ACQUISITION COST $132. 00 Reduction of costumer acquisition cost $60. 00 $30. 00 2018 Introduction 2019 Analysis 2020 Alternatives $15. 00 $13. 00 $11. 00 2021 2022 2023 Implementation Risks Conclusion

ASSUMPTION FOR ADVERTISEMENTS Number of advertisements 150 70 30 3 2019 Introduction Analysis Alternatives 15 2020 Implementation 2021 Risks 2022 2023 Conclusion

FROM REMITTANCE FEE TO ADS WILL REACH “ZERO TRANSACTION FEE” BY 2028 90% Remittance Fee Advertisements 80% 75% 65% 55% 45% 35% 20% 10% 2019 Introduction 2020 Analysis 2021 Alternatives 2022 Implementation 2023 Risks Conclusion

INCREASE IN TRAFFIC WILL DRIVE REVENUE GROWTH Amounts in MM 340 295 Revenue will be 2. 2 x vs 2019 219 159 2019 Introduction 182 2020 Analysis 2021 Alternatives 2022 Implementation 2023 Risks Conclusion

PROFITABILITY DRIVEN BY ADVERTISEMENTS 13% 9% 6% 5% 4% 2019 Introduction 2020 Analysis 2021 Alternatives 2022 Implementation 2023 Risks Conclusion

POSITIVE NPV OF USD 5. 0 MM IN CONSERVATIVE SCENARIO (PAY-BACK PERIOD 3. 5 YRS) Conservative 2019 Introduction Expected 2020 Analysis Optimistic 2021 Alternatives 2022 Implementation 2023 Risks Conclusion

KPIS AND CONTROLS Introduction Analysis Alternatives Implementation Risks Conclusion

Probability RISK AND MITIGATION 1. Advertiser Acceptance 1. • Invest in relationships and reduce rates 2. Employee Buy-In 2. • Increase focus and change 3. management Declining Customer 3. Satisfaction • Increase personalization of advertising Impact Introduction Analysis Alternatives Implementation Risks Conclusion

CONCLUSION Innovate business model through advertising revenue & new technology Introduction Analysis Alternatives Implementation Risks Conclusion

APPENDICE

APPENDICE Introduction Analysis Alternatives Implementation Risks Conclusion