CRAFT Systems

Presentation for investor, 2020

www.craft.systems/en

“LEGO” for cloud business applications

Problem

Companies need to digitize their non-standard business processes faster and at minimum cost

Out-of-the-box

Boxed products do

not cover all kind of

business processes

Own development

⚫ Long

⚫ Expensive

⚫ Complicated

According to IDC research: The number of applications businesses build will

drastically rise. Between 2018 – 2023, more than 500 million apps will be created.

That’s more than the previous 40 years combined!

Creating forms

using drag-and-

drop tools.

Adding business

logic using pre-

defined actions.

Publishing Web

application in

online App Store.

Running Web-

application

in a cloud.

SolutionCRAFT offers a platform for building Web-applications 10 times faster

Visual development

instead of traditional

programing using

Web-Designer tool

ProductCRAFT is a “Low-Code” platform for Web application development

Business applications

are built from

standard pre-defined

components (blocks)

The developer does

not require in-depth

programming

knowledge

To extend the business

logic, pre-defined

actions or simple meta-

language can be used

Creating MVP with minimal time and efforts without deep knowledge in technologies

Fast prototyping

Quickly add new features

For whom?

Small

business

Medium

enterprises

Startups

Digitizing custom business processes with minimal budget

Easy integrations

Additional services for customers

Cutting time-to-market for business critical software solutions

Implementing complex business processes

Minimizing expenses for maintenance and support

ClientsTarget Client / User Portrait⚫ Small and Medium Business, Medium Enterprise

⚫ Large amount of data in need of processing

⚫ Business processes change frequently, no development team

⚫ Requirements for scaling business applications, integration with external services

⚫ Budget: $500 – $100K per year

Use Case⚫ Companies have to hire teams of highly qualified programmers to solve IT problems for

their business

⚫ Various technologies and programming languages are used to create business

applications

B2B⚫ Users - business analysts, programmers, company employees

⚫ Owner of the budget - the head of the company, business owner, IT director

⚫ Budget Owner Values:

o increase in efficiency and speed of development and implementation of IT solutions

for business

o modernization and support of business applications without loss of quality

o scalability of solutions, ease of integration

Target markets:

Trade and services

CRM:

World — $48B,

$80B by 2025

Industry

ERP:

World — $35B,

Russia — $900M

$75B by 2025

Finance (banks)

FinTech:

World — $150B,

Russia — $1B

Rapid software development

(Low-code, No-code, RAD, Tools)

World — $46B by 2023

Digital transformation

World — $1,25T,

Russia — $33B

2% consistent conversion from Free to Paid plans up to

$50 for user/month for developing Web applications

Business modelWeb-Designer freemium (SaaS)

Cloud platform freemium (SaaS)

Technical support for platform/apps

Custom applications development

Web-apps on the platform (SaaS)

5% consistent conversion from Free to Paid plans up to

$20 user/month for running business apps on platform

From $50 user/month for using ready-made Web apps

running on the cloud platform (CRM, Fitness Mgmt etc)

At least 20% of paying users of platform and

applications – up to $50 user/month for tech. support

Minimum $100k for one custom app development

At 3K users, our projected revenue is $1,8MAverage LTV – $600 per user/year

The market for Low-Code platforms

Forrester predicts that by 2022 the market

of Low-code systems will reach $ 21 billionGartner: By 2024, 65% of all business applications

will use Low-Code technology

CAGR 44%Recent takeovers:

Siemens ← Mendix ($730M)

Temenos ← Kony ($559M)

Google ← AppSheet

Magic ← PowWow

Market key driversDigital transformation

Integration of digital services

Shorter timelines for business application development

Implementation of AI systems

Increased spending on innovations

IDC: By 2022, over 60% of global GDP will be

digitized with growth in every industry driven

by digitally-enhanced offerings, operations,

and relationships.

Forrester: Low-code systems can help

businesses develop software 10x faster.

IDC: By 2025, at least 90% of new

enterprise apps will embed artificial

intelligence. By 2024, over 50% of user

interactions will use AI-enabled

computer vision, speech, natural

language processing (NLP), and AR/VR.

IDC: By 2023, 75% of all IT spending

will be on 3rd Platform technologies,

as over 90% of all enterprises build

"digital native" IT environments to

thrive in the digital economy

IDC: By 2022, 70% of enterprises will integrate

their public and private clouds by deploying

unified hybrid/multi-cloud management

technologies, tools, and processes.

Differences from competitors

CRAFT Web platform⚫ Easier to use

building apps from ready-made blocks

⚫ 3 times more responsive Web UIdynamic Web forms generations via sockets

⚫ 10 times better apps performancecompiling business logic definition into the native

programming language (Erlang) to run on OTP platform

⚫ Unlimited applications scalabilityusing micro-services architecture

⚫ Simpler distributionSaaS, freemium model, online app store

TrackVia

Kony

BizagiELMA

Docsvision

Comindware

Terrasoft

Directual

Appian

SalesForce

OutSystemsPegaSystems

Mendix

Microsoft

PowerApps

Google

App Maker

K2

Low-Code systems on global market

Our clients of business apps on desktop platform

150+ customers in Russia and CIS

Product roadmap

⚫ The basic version

of the cloud

platform

⚫ Applications:

CRM and CRAFT-

Fitness

⚫ Enterprise

version of the

cloud platform

⚫ Integrations with

external CRM and

social networks

⚫ Ready-made

business

application store

⚫ Integration with

external ERP and

payment systems

⚫ Using AI to create

applications

⚫ Mobile client

⚫ Working with

Big Data and

Business

Intelligence

2020

2021

2022

2023

2024

Company growth plan

Start2019

2020

2021

2022

2023

2024

$70k Skolkovo mini-grant

$30k founders

Pre-seed

$300k plan

to raise for product

release

Round-A

plan to raise from

the international fund

to enter the EMEA

market

Seed round

plan to raise

to enter the North

and Latin America

market

$500MCompany score by

2025

The potential for

the takeover of the

company is in the

areas of FinTech,

Telecom,

eCommerce,

Information

Technology,

Platforms.

IPO exit is also

being considered.

Cloud

platform

development

Cloud

applications.

Entering the

American

market

CIS market

fitness industry

applications

Revenue $200k

Application

store.

Entering the

EMEA market

Revenue $1,8M

Revenue

$17,1M

Global scaling to

other markets:

APAC, MENA,

SEA etc

Revenue $7,1M

The free version of the application designer will provide an

increase in new platform users.

A public application store will make writing applications more

attractive by third-party developers and will bring an increasing

steady income from their publication and use.

Round-B

How much do we need to grow faster?

Investment amount $300K USD

Investment goal Product evolution

Investment horizon 1 year

IRR Forecast 141%

Founders

Developers and Technical support

6 people

TeamSales, Marketing

4 people

The number of employees

Dmitry Golubev, CEO

Alexander Rodin, СТО

dmitry.golubev@craft.systems

+7 904 051-6939

alexander.rodin@craft.systems

+7 920 040-3289

Master of Cybernetics. MBA.

25 yrs – in SW dev. industry,

10 yrs – director of SW company,

2,5 yrs worked in Canada and USA

Master of Mathematics. MBA.

Over 10 years experience in business SW

development and implementation.

CRAFT Systems

1,000current

users

$10 billionmarket

141% IRR

“LEGO” for cloud business applications

www.craft.systems/en

Annex

Project profileCategory / Business Model

⚫ SectorLow-Code Platforms, Business Automation

⚫ ClientsSmall business, medium Enterprises

⚫Monetization ModelRenting SaaS platform and applications, technical support services, consulting, development custom applications

⚫ PricingSaaS platform — from $10 user / month, SaaS applications — from $20 user / month

Geography

⚫ Present timeRussia, CIS(Kazakhstan, Kyrgyzstan)

⚫ After 2–3 yearsUSA, Asia, Europe

Stage

⚫ Revenue$200K per year

⚫ Investments$70K Skolkovo mini grant

⚫ Investments of the founders$30K, intellectual property

Team

⚫ Founders:2 (CEO, CTO)

⚫ Staff:10 (Engineering – 6, Sales – 4)

Vision

⚫ Bring development platform and business applications to the cloud within 1 year

⚫ Enter the global market with a cloud-based Low-Code development platform and cloud-based business applications (services sector, etc.) within 2 years

⚫ Become a key provider of cloud-based business applications in Russia and the world in 4-5 years

Business modelKey cash flows

⚫ Selling online access to the development platform (Designer) based on the SaaS model— from $10 user / month.

⚫ Sale of online access to applications (CRM, Fitness, etc.) using the SaaS model— from $20 user / month.

⚫ Sale of a marketplace (platform) for ISP providers using the SaaS model — from $5 user / month.

⚫ Selling licenses for the local (Enterprise) version of the platform — from $50 user / month.

⚫ Selling technical support for development platform and applications — from $10 user / month

⚫ Development and implementation of custom applications based on the platform — from $50K for a project

When payment occurs

⚫ Sale of online access - payment monthly for a period of 3 months or more

⚫ Sale of marketplace - payment in advance for a period of 12 months or more

⚫ Sale of local licenses - payment in advance for a period of 12 months or more

ARPU (Average Revenue Per Paying User)

⚫ Stationary clients$5k – $10к for license

⚫ SaaS:$50 - $500 per month

Customer LTV and lifetime

⚫ Stationary clientsLTV: $60k – $120k per year, life time: 3 – 5 years

⚫ SaaS:LTV: $600 – $6k per year, life time: 1+ year

CRAFT platform

Provides resources to run

ready-made applications from

the cloud storage.

The user simply selects the

desired application from the

store and it runs on a cloud

platform.

A cloud storage where any

developer or company can

publish ready-made

applications.

After publishing the

application, it can be used by

any 3rd party user or company.

Cloud execution platformWeb-Designer tool Cloud application store

Applications are built from

standard components; the

developer does not require

programming knowledge.

To extend the business logic,

pre-defined actions or simple

meta-language can be used.

CRAFT Web Designer

⚫ OS-independent

⚫ Cross-browser

⚫ Multi-tenant

⚫ Multi language interface

⚫ Applications versioning

⚫ Team development

⚫ Running apps from designer

⚫ Publishing ready applications

CRAFT Web Applications

⚫ OS-independent, cross-browser

⚫ Very fast and responsive Web UI

⚫ Cloud Deployment Using Docker /

Kubernetes

⚫ Deployment in the local network

of the company (Enterprise

version)

⚫ Quick launch from the

Application Store

CRAFT platform technology

⚫ 10x speed of creating and changing

applications (assembly of “blocks")

⚫ Openness and extensibility (flexible

component model)

⚫ Ease of business processes definition

(meta-programming)

⚫ Easy integration with existing software

(iPaaS)

⚫ High Performance (Erlang)

⚫ Unlimited scalability (micro-service

architecture)

Metadata editor

CRAFT Lang compiler

Web UI editor

Interface service

with external data

Designer Web UI

Metadata service

Meta-Data

Applications Web UI

CRAFT Lang executor

External data

and services

Web-client

External System

API

External callsWeb-designer

https://youtu.be/4JmLwew6rKo

Video about CRAFT platform:

CRAFT platform innovationsQuick creation for companies their own custom software for business processes

⚫ 10x speed of creating and changing applications (assembly of “blocks")

⚫ Ease of business processes definition (own meta-programming language)

⚫ Openness and extensibility (flexible component model)

⚫ Easy integration with existing software (iPaaS)

⚫ High Performance (Erlang)

⚫ Unlimited scalability (micro services)

⚫ Convenience and speed of UI (Web-sockets)

⚫ Use Choice: Locally or in the Cloud (Docker / Kubernetes)

Comparison with competitorsCraft Systems 1C Comindware SalesForce OutSystems Appian Mendix

Microservice architecture — — — — —

Web UI based on Web Sockets — — — — — —

Embedded Business Logic Language — — — —

Extending logic with an external language Java/C#/Go — C# — JavaScript — Java/JS

Definition of the logic in the form of workflow

Versioning of the metadata — —

Web application designer — —

Cloud Access using SaaS model —

Deployment in a Private Cloud —

Marketplace for applications — —

There is a free version — — — —

Subscription price for 1 user per month $10 $10 $10 $25 $62 $90 $107

Financial performance

P&L 2020 2021 2022 2023 2024

Number of users 1,360 2,040 5,740 1,5960 42,150

Sales $297,000 $426,000 $1,843,200 $7,107,000 $17,078,000

Expenses $373,464 $844,600 $1,356,000 $1,938,000 $3,309,600

Of which to marketing $96,000 $312,000 $600,000 $984,000 $2,100,000

CAC $71 $153 $105 $62 $50

Profit $-76,464 $-418,600 $487,200 $5,169,000 $13,768,400

Growth potentialClients by product

Clients by region

Clients by company size