@Dormando INVESTMENT PROPOSAL Confidential January 2016,Executive Summary MI VecuSeeMN Ue MU NIC OO c OM ON Nem OOH NNN MteL0 10 015) European bedding market Dormando strives to become the leading online retailer of mattresses and bedding furniture in Europe Business financials are outstanding and trajectory is extremely OSA} A EROclN ecm NSM OSCR MeN ene Oe MGC EO SAU RUS industry, have an outstanding founding team and are supported by leading e-commerce experts We require a total funding of 4m EUR for 2015 to invest into personnel and marketing to boost growth substantiallyExecutive Summary ¢ leading online retailer of OMT HAST Oe Se © BSS financials are outstanding and tre eeNm EUR LULL) Aue One Lele ele 7The European bedding market has a volume of more than 50bn EUR, 20% of that in Germany Estimated revenues in EU (+ Switzerland and Norway), EUR million ~51 7 Accessories! Bedding products 40 Mattresses and i | frames 8 Sleeping furniture Germany France UK ltaly Spain Others EU+ ‘Switzerland + Norway volume as bedding productsStrong online growth rates are expected for the bedding industry Estimated revenues in Germany, EUR million ~10 bn ~10bn Offline Eee Online 2014 15 16 7 2018 Source: Statista, Gfx; competitors’ annual reportsYet, there is no online player with high bedding competence and broad assortment High "| might find what! need" “The place to go" Perceived bedding competence @© x01 stop Low “| know what | want! _ Small Large Bedding assortment size @ Size = Incicative for online bedding revenuesThis online vacuum has been created by the industry itself + Manufacturers and retailers jointly prevented the rise of online players * They did so to protect margins and revenues + Manufacturers simply reject doing business with online players — which even led to fines from the German anti trust agencyExecutive Summary Sm Coa cyt intapped online potential ina ~50bn EUR Famer PEO M EU CLE + Business financials are outstanding and trajectory is extremely promising Wiel) | MMIII nt relations within WE Cuesta, MMU VEU MCODULUTe Lure cere U eUOR Ce 30 OVA Cercle Rem HO RH ERs) e100) | Ui ane eel i aul ahi ys CUEIG (0 stanMISSION AND VISION We will change customers’ behavior to purchasing mattresses and sleeping furniture online, and become the leading online bedding retailer in EuropeFROM: User elise S515 2h co DORMANDO — Ue Ula nlc largest selection IMO OCS AOR) . , beds in local stores. ! Itis a very tedious experience given market intragsparency and technicakanarketing Eloe (000 BaP feMless-N0(s10/<) 04 <<) oN =), 0 Ieee cg (non-representativé survey-amongeO,people)Dormando launched in November 2013 and drives sales through service @ Dormando BO == Interactive online mattress consulting tool High-quality and sales-effective telephone support 100 day return policy, which increases conversion and almost No effect on returns Great ep rores to up- and cross-sell, currently under developmentExecutive Summary SMM NeKcM SHCA NN e eMU acl) MO NINN Oe) Neer) N Uy ater PTR UIUC * Dormando strives to become the leading online retailer of mattresses and bedding furniture in Europe V Mn relations within ue industry, n outstanding founding team and are supported OVA Cercle Rem HO RH ERs) e100) a total funding of ill au a0) sult nd marketing t owth substantiallyWe forecast strong growth with a break-even in 2017 Revenues, EUR million EBIT, EUR million 180 160 140 120 100 80 60 40 20 ~160 69 ~30 | 2014 2015 2016 2017 2018We have a great trajectory with an annual run rate of ~3m EUR based on Jan 2015 forecast Net revenues after cancelations and returns, EUR thousand 260 © = annual run rate ooo of 3m EUR 200 Start of scaling 180. 100 Proof of concept e i are ce first lays less o +e 618i ig a & & expected cancel- Nov Deo Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov’ Deo’ Jan’ !#onsreturns 2013 2014 15 Already including expected/calculatory cancellations 2 Estimation based on first 11 days of January 2015Key financials highlight the attractiveness of the business ~ 0 stock keeping 6-8% G0 % product ster cescra consultation ~490 ietcartsiz product return rate All players usually order mattresses and beds from manufacturers only once the customer has ordered Very low returns albeit 100 day return policy. In 20% of the cases one can even re-convert customers to a product with a higher margin. Intransparency of the product segment makes customers dependent on a consultation and are hence easy to influence via chat, email or phone Average net product price of ~350 EUR with 1.4 products per cart equals ~490 EUR cart sizeDormando operates with ; positive contribution margin Example financials per order (averages based on Jan 1-6, 2015), EUR 500 450 400 350 300 + 250 + 200 45 150 all 100 7) 50 aes 0 _ Revenues COGS Grossmargin Feesand Customer Contribution Customer life- logistics acquisition margin time value (CLV) order within 24 monthsMattresses are bought infrequently, but customer insights provide huge potential to drive CLV Examples: Customer insight Targeted (e-mail) offer Bought a mattress > Offer a fitting slatted frame Visited page on sweating during the night > Sell a breathable blanket Indicated a neck problem , Recommend a better suited, in online mattress advisor ergonomic pillow Bought a box spring bed » Suggest new fitted sheets Female customer purchasing , Offer more seasonal seasonal linen linen at least twice a year Expanding into bed textiles and accessories will increase the potential furtherCurrent marketing builds on paid search, building brand via offline marketing as next step Source of visitors Actuals, January 1-11, 2015 Referral _ Others Direct Organic search Lee To RSet Tay CPO, EUR 93 ROM, % 496% 1 Gross revenues before cancellations / total marketing spend January 2016 business plan Others Investment into brand building Referral Organic search eT a 300 (2018: 67) 167% (2018: 566%)Executive Summary * There is a huge untapped online potential ina ~50bn EUR TMU OOP EULCLE * Dormando strives to become the leading online retailer of mattresses and bedding furniture in Europe * Business financials are outstanding and t promising a total aie i ill ahi ys sultDormando has unparalleled, trust-based relationships to almost all brands We are the first and only player with expertise in e-commerce to gain the trust of almost all manufacturers and, thus, broad market access. This is a unique asset you won't find anywhere else in the industry and won't be able to buy — not even Rocket Internet with its deep pockets Dormando has more mattress brands than any other retailer in Germany, including offline storesDormando is led by its 2 outstanding founders FOUNDER: Manuel Miller, MBA Visionary leader Founded a medical mattress company at the age of 19 and ran it for 10 years Excellent network within the whole industry EMBA (Kellogg-WHU) FOUNDER . . Dr. Dennis Schmoltzi Analytical mega-mind Started with McKinsey at the age of 19, left as project manager after 7 years Created first websites at the end of the 1990s. Diploma (EBS), doctoral degree (Uni Frankfurt)We have leading e-commerce experts actively supporting us as business angels 9 Dominik Wojcik Founder Trust Agents et Inter nsible for Elias Russezki Founder Deltamethod SEM guru, dire Rocket Internet and \ Max Renneberg Founder Esanum, Kochhaus and Deltamethod Investment and retail guru, excellent rel 1a broad and Dormando-relevant it nships (or networkWe have proven excellent execution skills 2013 AUG: Company formation (87,5k EUR) Setup of Magento shop system APRIL Firstconcept and design 2014 2015 ~100k EUR rev/mo. and >1k unique an Opening oo | ce rine meee Dormado store | @ >1,100 fc id MBG c } eo \ products public fund MBG H be 0 in shop | ee Launch of e—? U Team size design 325 brands ail reorush na 1 Launch bf inportoio «Pele Dormando with 5 brandsExecutive Summary SMM NeKcM SHCA NN e eMU acl) MO NINN Oe) Neer) N Uy ater PTR UIUC * Dormando strives to become the leading online retailer of mattresses and bedding furniture in Europe + Business financials are outstanding and trajectory is extremely ese) V Mn nt relations within ue industry, MONE ULE) founding team a MeRelceust eyes OVA Cercle Rem HO RH ERs) e100)We require a total funding of 4m EUR in 2015 to build a dominant presence Financials for 2015, EUR milion 9.3 9:3) Ea Liquidity buffer/contingency O3 tm Other OpEx MEW Personnel Funding Marketing (incl, TV) Revenues COGS, locistics transaction fees Source Use of of funds fundsAdditional funding in 2016 required before breaking even again in 2017 Planned investment rounds nn 2017 Breaking even, but a | 2016 continuing trajectory based Raising ~8-10m EUR to —_N Operative cash flows, no additional funding expected 2015 continue aggressive Raising ~4m EUR to take — marketing, winning Dormando to next level international markets and with broader presence incl, reaping synergies with TV campaigns offline storesThere is a clear priority plan for the next 6 months Massively extend portfolio in beds, bedding textiles and private label products Start marketing for existing customers Advance to a fully mobile responsive UX Increase organic visibility by effective SEO Build a brand in GermanyThere are plenty options for a future exit — but our priority is to grow the business Manufacturers interested necriced HILDING in controlling sales channels a . . XXX—ied Eas Old-school offline retailers eo — 7 ee Retailers with online presence in bedding and furniture otto group Financial investors (with or . without related portfolio companies) SteinhoffCATES el eyem ul Tee MULES tata Join us as an investor!AppendixCurrently focused on drop shipping, building own stock is on the agenda for 2015 am” 2016 onwards Constantly expanding ————_ 2015 stock to keep delivery times low and increase Gaining first experience 2013/14 in stock keeping! with conversion, especially once Almost 100% drop selected products to brand building with shipping as customers increase conversion (esp. ‘Marketing starts are used to delivery times for bed linen and of 3-6 weeks for accessories), bundle mattresses and beds products, reduce logistic costs and create private labels with higher margins Working ~0 EUR ~150k EUR ~500k in 2016 to capital ~4m EUR by 2018 required Starting January 19, 2015, frst warehouse space rented (100 m2)We expect that up to 50% of our customers will return within 24 months Returning customers, 2018 target percent 50% 30% 16% - LI ‘ly actuals, 2y estimate, 2y with effective 2y with marketing and no marketing! no marketing | marketing extended product portfolio? 1 No e-mail marketing or similar activities so far, stil 12% of customers 2 Extended product pototia incuding bedding produc, nen,Margins can be increased further by creating own brands similar to Casper.com Casper very successfully sells its product in USA through a very emotional marketing approach A similar potential exists in Europe, thus we build private labels for Dormando to increase margins First example: Lovgren, a private label brand for box spring beds (www.lovgren-bedding.com)