OPENLEARNING LIMITED — Capital/Financing Update 2021

Dec 13, 2021

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Business Update and Capital Raising Presentation

OpenLearning Limited (ASX: OLL)

14 December 2021

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Starting with Australia’s $7.5b online lifelong learning market

$7.9b Australian online education market (2021)

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$7.5b online lifelong learning market
Non-accredited courses Accredited courses
($245m) ($7.2b)
OpenLearning is expanding into the accredited segment
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Source: Online Education in Australia - Market Size 2007–2027: https://www.ibisworld.com/au/market-size/online-education

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Owner and operator of one of the world’s leading online education platforms

• Complete solution for education providers to build a lifelong learning business

3m

Learners[1]

• Next generation learning platform

• Easy to use course setup tools

• Digital credentialing and portfolios for micro-credentials

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196
Education
providers [2]
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50m

Learner interactions

• Robust assessment system

• 'Know Your Learner' to identify academic misconduct

• Integrated marketing tools and payment gateway

• Scalable, modern cloud application (no IT required)

• Differentiated by technology, learning philosophy, brand and geography

• Proprietary platform recognised for in-depth, high quality learning

• Critical mass in two large lifelong learning markets

• With inherent network effects

• Single global platform where everyone has an OpenLearning account

• Consistently increases learner engagement/satisfaction by 20+ points

• Total unique registered learners since the start of the OpenLearning platform as at end September 2021. 2. Education providers subscribed to OpenLearning with ARR in excess of $500/year as at end September 2021.

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Offering a suite of products to enable education providers to build lifelong learning businesses

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• Providing an innovative learning platform and tools

• Platform on a SaaS model to enable education providers to

• Subscription deliver courses online • Partnering with top institutions to deliver programs

• Program on the OpenLearning platform with capabilities

• Delivery across full spectrum of program delivery

• • Providing a marketplace and learning design

• Value-add services to clients to drive network effects and

• services accelerate platform adoption

Note: Platform Subscription revenue includes: OpenLearning platform subscription, BEST Network; Program Delivery revenue includes: UNSW Transition Program Online, CS101 (pending); Valueadded services revenue includes: marketplace, learning services and OpenCreds

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OpenLearning’s current growth initiatives

• Provision of a market-leading, end-to-end platform for education providers to move online

• Investment in product-driven growth to increase sales and marketing efficiency

• Expansion of its SaaS model’s addressable market by targeting new sectors and geographies:

• United States

• Indonesia

• Registered training organisations and private education providers in Australia and Malaysia

• Increasing enrolments and university partners for the UNSW Transition Program Online

• Entry into the corporate up-skilling market with:

• Computer Science 101 (CS101)

• Technology-focused OpenCreds

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Strategy is now delivering a step change in revenue

• Platform revenue increased by 186% YoY to $0.825m, expecting Q4 FY21 to continue this trend

• Platform revenue is comprised of:

• Platform Subscription

• Program Delivery

• Successful launch of the UNSW Transition Program Online (TPO) in March, attracting over 100 students in FY21 thus far

• SaaS customers grew 37% YoY to 196 and annual recurring revenue (ARR) grew 15% YoY to $1.414m in Q3 FY21

Platform revenue (AUD, $m, unaudited)

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+186% YoY
$0.825
$0.721
$0.412
$0.323
$0.288
Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21
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1. Annualised recurring SaaS revenue, calculated by utilising the generally accepted industry standard, which involves multiplying the monthly accrued SaaS revenue in the month at the end of the quarter by 12 (months). The ARR calculation does not take into account the future expiry of the term of any contract under which SaaS revenue is generated or any customers lost during the relevant month. SaaS ARR includes platform subscriptions from both the OpenLearning Platform and BEST Network.

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Investment in sales, marketing and partnerships to drive platform revenue growth in 2022

• New sales/marketing processes and team members are now in place in Australia and Malaysia

• Testing market entry into the U.S. via outsourced sales representatives targeting college/universities in Q4 FY21

• Outsourced sales representatives working with Australian partnerships team to target registered training providers

• Expansion into Indonesia began in Q3 FY21 with local sales team and support from Malaysian office

• Developing channel partnerships and affiliate deals

• Focus on account management with larger clients to grow usage and provide value-added services

• Self-service usage-based SaaS model utilising Stripe is working and enabling supporting inside sales

EXISTING PRODUCTS

NEW PRODUCTS

• Usage-based • UNSW TPO for Platform SaaS more universities

• • Australia and • CS101/OpenCreds

• Malaysia for corporates

• • Private education and universities providers and • BEST Network universities

• • Usage-based Platform SaaS

• • Piloting targeted Future

• outbound sales in the United States opportunities

• • Indonesia universities

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Highly scalable model for program delivery

Overview

A different approach to Online Program Delivery (OPM)

• Partnerships with top institutions to deliver programs on its platform

• Capabilities across full spectrum of program delivery, including learning design, technology, learning platform, teaching, online facilitation, support and assessment

• OpenLearning Traditional OPM[1] #$%

• Xyz

• Learning platform • Same learning platform used • Different learning platform for quality for all programs each program

• • Student-centric delivery model • Delivery quality and student for higher learner engagement experience vary and satisfaction

• Demonstrated by UNSW TPO, now recognised by 6 universities

• CS101 developed in partnership with Canva, Microsoft, Alibaba Cloud, Chronosphere and CT4

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• Ability to scale • • One program accepted by One program to only one multiple institutions, more institution, difficult to scale scalable

• OPM stands for Online Program Management, OPM providers work with education institutions to take their academic programs online.

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Building a global university pathway program with UNSW

Successful launch in FY21

Attracting international students across the globe

• Setup and launch of UNSW TPO completed successfully with four intakes in FY21, attracting over 100 students and generating substantial new revenue

• Formally recognised by 6 universities in Australia, United Kingdom and New Zealand, increasing the addressable market for the program

Scale and enhance in FY22

• Five intakes scheduled for FY22 in February, March, July, August and November

• ~25K[1] international students in Australian university pathway programs before COVID, expecting an increase in interest in FY22 as borders re-open

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• Focus on increasing the number of universities recognising the TPO, growing enrolments and continuous improvement to be the market leader

Including students who have paid or received offers

1. 2019 international students in Australia enrolling in undergraduate diploma as a proxy for university pathway courses, https://internationaleducation.gov.au/research/international-studentdata/Pages/default.aspx

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Capitalising on growing demand for computer science and tech skills with top-tier partnerships

• CS101 (Computer Science 101) launched in Q4 FY21 with over 50 learners in the first cohort

• Target the growing demand for tech skills by focusing on foundational computer science, computational thinking, programming, data science and algorithms

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Tech industry Leading tech experts companies

• Brings together OpenLearning’s in-house expertise, industry experts and leading tech companies

• Industry partners include Canva, Microsoft, Alibaba Cloud, Chronosphere and CT4

• Business development team in place to target Australia, Malaysia and Singapore corporate sectors

• For more information: https://www.cs101.com/

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Tertiary education providers

Australian tech workforce to grow 2x faster than other occupations, resulting in 809k tech workers by 2024, an increase of 113k from 2019.

Source: 1. Australian Government Labour Market Portal, 2. Deloitte ACS Australia’s Digital Pulse 2020

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Capital Raisings to Fund Growth Initiatives

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Capital raising to fund growth initiatives

• Placement to Alchemy Tribridge Sapphire Pty Ltd (ATL) to raise $2.9 million at $0.093 a share

• ATL an investment group with a reputation for driving outsized returns in tech businesses

• ATL becomes OpenLearning’s largest shareholder and will have board seat to support growth

• Non-renounceable rights issue to eligible shareholders to raise up to $3.06 million

• Rights issue provides an opportunity for eligible shareholders to increase their holding by subscribing for 1 ordinary share for every 6 shares held on the record date (14th Dec 2021)

• ATL is expected to participate in the rights issue, provided it’s stake does not go beyond 19.9%

• $5.96 million raised through the placement to ATL and rights issue will be used to position OpenLearning for a step-change in growth

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Alchemy Tribridge to support OpenLearning’s growth

• ATL creates value by acquiring and ‘reimagining’ multiple assets to win in a new market

• ATL brings world-class capabilities across five critical areas: Strategic Insight; Financial Acumen; Growth Acceleration; Storytelling and Media, and Talent Impact

• ATL’s team will actively work with OpenLearning to support the next phase of growth, including:

• Mr Ben Shields, a Founding Partner of ATL, specialising in growth strategy, M&A strategy and strategy execution has now been appointed to OpenLearning's board

• Mr Michael Hunter, a Founding Partner and COO of ATL and formerly from Macquarie Capital, will help support and build OpenLearning’s corporate development capability.

• Mr Greg Hayes, a Founding Partner of ATL and former CFO of Brambles, will bring his ASX experience to provide support to OpenLearning as it scales.

• ATL's team has previously with a U.S. based tech company to grow them from $US20m to well over $US2b in enterprise value

Find out more about ATL at: https://www.alchemytribridge.com/

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Entitlement issue timetable

ment issue timetable	ment issue timetable
Announcement of Entitlement Issue		26 November 2021
	Announcement of Entitlement Issue	26 November 2021
	Lodgement of Prospectus with the ASIC and ASX	6 December 2021
	Announcement of Revised Timetable	7 December 2021
	Ex date	13 December 2021
	Record Date for determining Entitlements	14 December 2021
	Offer opening date, Prospectus sent out to Shareholders and Company announces this has been completed	15 December 2021
	Last day to extend the Closing Date	21 December 2021
	Closing Date as at 5:00pm AEDT*	24 December 2021
	Securities quoted on a deferred settlement basis	29 December 2021
	Announcement of results of issue	5 January 2022
	Issue date and lodgement of Appendix 2A with ASX applying for quotation of the Shares	5 January 2022
	Quotation of Shares issued under the Offer*	6 January 2022

• Entitlement issue timetable as announced to on the ASX on 7[th] December 2021. The Directors may extend the Closing Date by giving at least 3 Business Days’ notice to ASX prior to the Closing Date. Accordingly, the date the Shares are expected to commence trading on ASX may vary.

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Summary

• Key components of the Company’s strategy are now in place and beginning to deliver revenue growth

• Step change in revenue in Q3 FY21, with 186% YoY growth to $0.825m.

• Successful launch of the UNSW TPO in FY21 with four intakes and recognition by six universities

• CS101 and growing library of technology up-skilling OpenCreds targeting the corporate sector

• Investment in sales, marketing and partnerships to drive revenue growth in FY22

• Capital-efficient entry into the United States and Indonesia for the Platform SaaS segment

• $5.96 million capital raising to fund growth strategy into FY22

• Strategic investment from Alchemy Tribridge to re-position the company and increase shareholder value

• Sales pipeline is growing with increasing interest from education providers to invest in online learning solutions as the world begins to live with COVID

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Q&A

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Disclaimer

This presentation has been prepared by OpenLearning Limited ( The Company ). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Company. You should not treat the contents of this presentation, or any information provided in connection with it, as financial product advice or advice relating to legal, taxation or investment matters.

This presentation and the information contained herein and all electronic and/or hard copy documentation which comprise it are being provided to you solely for your information and may not be copied, reproduced, distributed, disclosed or published, in whole or in part, to any other person for any purpose whatsoever at any time without the prior written consent of the Company. This presentation is not an offer to any person nor is it a prospectus.

The Company has prepared this document based on information available to it at the time of preparation. No representation or warranty (whether express or implied) is made by the Company or any of their officers, advisers, agents or employees as to the accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or provided in connection with it, or any omission from this presentation, nor as to the attainability of any estimates, forecast or projections set out in this presentation.

This presentation is not investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. The information contained in this presentation has been prepared without taking into account the objectives, financial situation or needs of individuals.

This presentation is provided expressly on the basis that you will carry out your own independent inquiries into the matters contained in the presentation and make your own independent decisions about the affairs, financial position or prospects of the Company. The Company reserves the right to update, amend or supplement the information at any time in their absolute discretion (without incurring any obligation to do so).

The Company, nor their related bodies corporate, officers, their advisers, agents and employees accept any responsibility or liability to you or to any other person or entity arising out of this presentation including pursuant to the general law (whether for negligence, under statute or otherwise), or under the Australian Securities and Investments Commission Act 2001, Corporations Act 2001 (Cth), competition and any such responsibility or liability is, to the maximum extent permitted by law, expressly disclaimed and excluded.

Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. It does not include all available information and should not be used in isolation as a basis to invest in the Company.

This presentation contains reference to certain intentions, expectations, future plans, strategy and prospects of the Company.

Those intentions, expectations, future plans, strategy and prospects may or may not be achieved. They are based on certain assumptions, which may not be met or on which views may differ and may be affected by known and unknown risks. The performance and operations of the Company may be influenced by a number of factors, many of which are outside the control of the Company. No representation or warranty, express or implied, is made by the Company, or any of their directors, officers, employees, advisers or agents that any intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved.

Given the risks and uncertainties that may cause the Company actual future results, performance or achievements to be materially different from those expected, planned or intended, recipient’s should not place undue reliance on these intentions, expectations, future plans, strategy and prospects. The Company does not warrant or represent that the actual results, performance or achievements will be as expected, planned or intended.

This document does not constitute any part of any offer to sell, or the solicitation of any offer to buy, any securities in the United States or to, or for the account or benefit of any “US person” as defined in Regulation S under the US Securities Act of 1993 (Securities Act). The Company shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to any US person without being so registered or pursuant to an exemption from registration including any exemption for qualified institutional buyers.

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https://solutions.openlearning.com/ investors@openlearning.com

Authorised by: Adam Brimo, Group CEO & Managing Director