Commerce Sync

Simplifying small business

Executive Summary

© 2016 LucaLogix, Inc.2

Commerce Sync is a SaaS company that automates

bookkeeping for small business

We closed a $2.55 million Series A in August and

November 2015

We serve 10,000 SMBs and grew recurring revenue 291% from

June 2015 to June 2016

We distribute through the largest and fastest growing channels in

payments and commerce

The Real Life Of A Small Business

© 2016 LucaLogix, Inc. 3

Evokes images of this…

The Real Life Of A Small Business


…but actually involves lots of this

The Numbers


40% of small business owners say bookkeeping and taxes is the worst

part of owning a business

40% 300hours per year

A typical small business owner spends 300 hours per year on bookkeeping

and accounting

>$1,000

A typical small business owner spends >$1,000 per year in administrative fees

(3 in 10 spend >$10,000 per year)

Spent in administrative feesof small business owners

Spent on back-office work

%

The reality for a small business owner is time spent and money wasted on despised tasks:

Monumental Relief For Small Business Owners


Gather receipts…

…Key enter data

Review, correct, edit, reconcile…

…Upload to accounting

software

Cross fingers and hope it is

right…

… and repeat: daily, weekly, monthly?!

Step 2: Connect using accounting credentials, configure (optional)

Step 3: Complete, accurate and fully automated bookkeeping

The Old Way

>20 hours , every month

The Commerce Sync Way

Less than 1 hour , forever

Step 1: Activate from POS

ü Accurate Data

ü Time Savings

ü Business Visibility

A Large “Niche” Market


There are 3.4 million storefront businesses in the U.S., most using standalone point-of-sale (POS) and accounting software

Cloud technology is disrupting the POS and accounting software industries, fueling growth. This is particularly true among SMBs• POS units will grow 87% by 2020, driven by the adoption of 25 million tablet POS systems• Small business accounting software (QuickBooks and Xero) will grow 169% by 2020

Small business owners are embracing software• 85% of owners will invest more in software in the next 5 years• 81% say it is important that the software solutions they use work seamlessly together (today, most do not)• Millennials are the next generation of small business; 67% of business owners expect to retire within 10 years

Our Secret: Bookkeeping automation is driven by scalable technology, complemented by contextual awareness• There are 1.7 million bookkeepers in the U.S. performing manual data entry• The accounting services industry generates >$54 billion annually, excluding the Big Four• Effective automation requires complex, “application aware” technology; not a simple integration

Sources: Intuit, Xero, Street Fight Insights, Bureau of Labor Statistics, Statista, Aite, Paychex

What Sets Us Apart?


1. Efficient distribution (The greatest challenge in selling to SMBs)• Tightly coupled relationships with large channels allows us to leverage their sales efforts• Low cost of customer acquisition, yields LTV : CAC > 3

2. Highly valued product• Major (not incremental) improvement for SMBs, addressing a genuine pain point• Customers are happy to pay for the service ($250-500/year)

3. Unique, defensible position• Channel relationships are typically exclusive or near-exclusive• Proof points of channel renewal (Authorize.net), replacement (Square) and expansion (Visa)

“We were able to save three hours a day, allowing us to focus on customers and build a community business.”

– Little Jenna’s Grooming, South Riding, VA

“Commerce Sync not only saves time, but we save money by not having to hire a bookkeeper to help with data entry.”

– Green Envy Garden & Gifts, Albany, GA

There are three keys to our success:

Our Customers Love Us


“I love the reliability and time savings offered by Commerce Sync. I can see the transfers happening

and rely on it happening every day!”

Angela Milano, Pitman, NJSecond Chance Retail (Acquired via Clover)

“Our accounting had become a nightmare before Commerce Sync, but now we use the

time we save to focus on running a successful business.”

Lisa Maggio, Boulder Creek, CACentral Avenue Paper & Print (Acquired via Square)

“Commerce Sync has saved us many, many hours of manual entry. Customer support

has been great!”

Scott Carden, Spartanburg, SCBanana Box Market (Acquired via Clover)

We Are Growing Rapidly


Commerce Sync Recurring Revenue

$57,358 $56,308

$82,265

$145,446

$183,095 $211,631

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

We Have Generated More Than Just MRR


Q1 25 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

Recurring Revenue $57,358 $56,308 $82,265 $145,446 $183,095 $211,631

One Time Revenue $70,000 $170,000 $8,000 $17,578 $280,410 $61,262

Total Revenue $127,358 $226,308 $90,265 $163,024 $463,505 $272,893

Sources of one time revenue:

Recurring revenue is our focus, but we have generated a substantial amount of one-time revenue from related partners to help build our business

We Achieve A Lot With A Little


Developed the best automated bookkeeping product for SMBs in the market

Opened and developed key distribution channels, including Clover (First Data), Square, Stripe, Visa, NCR and iPayment

In a little over a year with less than $2 million, we:

Grew recurring revenue 291% to $74,000 in June 2016

Generated more than $1.3 million in total Commerce Sync revenue

Handled more than 60 million small business sales records, eliminating thousands of hours of manual data entry

Software

Commerce Sync