PITCH DECK - SGS JSC

PITCH DECK

Scalable Global Solutions JSC

2022

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SCALABLE GLOBAL SOLUTIONS JSC

Scalable Global Solutions is a Croatian-based startup that enables international small and medium-sized businesses to create and manage their own teams and departments in Croatia without opening an entity.


We make it easy to implement, employ, pay, support & manage teams and departments.


By creating DaaS [Department as a Solution], our clients solve four key issues:​

BUSSINES GROWTH

REDUCING OPERATIONAL COSTS UP TO 50%

FINDING AND KEEPING EMPLOYEES

INCREASING EFFICIENCY BY 15%

HQ: Zagreb, Croatia

Industry: Future of Work, Business Solutions, HR, SaaS, BPO, Managed Office Space

Number of employees: 50-100

Fundraising stage: Seed

Looking to raise: €2M

Use of funds : Accelerating sales, Growing the Channel Partnership network, Creating the SGS ONE 2.0, Branding & Marketing

MISSION

Our focus is to drive, create and optimise our client´s impact in their market by creating a Department as a complete solution  for their business growth.

VISION

To become the global DaaS provider.​ We are introducing a new concept to clients that enable them to become more successful and competitive. Their success is our success!

THE ISSUE

The global SME sector desperately needs cost-saving, process optimization, and finding talent. This has forced 96% of all companies in Europe to adapt and rethink their business strategy. Target market companies face problems such as:

DRIVING EFFICIENCY

  • Not using state–of–the-art processes.
  • The value chain can be improved.
  • Too many things are done in-house
  • 61% increase in operational costs since 2019

WINNING TOP TALENT

  • Finding the right people
  • Getting talent at all
  • 50% increased market shortage of competent and skilled employees in 2023

DRIVING EFFECTIVENESS

  • No Business Process Optimisation implemented
  • Not doing more with less management
  • 58% increase in employment cost in the last decade

Lack of competent and skilled labor is the key challenge to 25% of small and medium businesses in 2020 – the number is close to 50% in 2022. Having a highly-skilled employee base is crucial for innovation.

SOLUTION

DaaS The Future of Employment With DaaS, we enable clients to build and manage their remote teams and whole departments in our offices in Croatia. The game-changing solution is that our clients:


Get access to a worldwide talent pool​
Handpick who they want to hire​
Do not need to create a subsidiary​
Can easily manage their new team and department with our SGS ONE software​

MARKET POTENTIAL

Total Addressable Market [TAM]                                                                                                                                                                                                    € billion

LATAM 62,40
USA 157,00
ASIA 189,20
CENTRAL EUROPE & GCC 221,41
Total 630

TAM Global Potential

Total 630€ billion

  • CE & GCC 221,41€ billion
  • ASIA 189,20€ billion
  • USA 157,00€ billion
  • LATAM 62,40€ billion

SAM Europe Potential

Total 114,21€ billion

  • DE 33,02€ billion
  • AT 5,19€ billion
  • CH 5,99€ billion
  • UK 23,40€ billion
  • BENELUX 12,36€ billion
  • SCAND 11,23€ billion
  • FR 23,02€ billion

Servicable Available Market [SAM]

DE 33,02
AT 5,19
CH 5,99
UK 23,40
BENELUX 12,36
SCAND 11,23
FR 23,02
Total 114,21

Investments in technologies supporting Future of Work initiatives will exceed $1 trillion worldwide by 2024 with a robust 17% CAGR over the five-year forecast period.

MARKET FACTS by PWC Q4 2018

Company Challenge – Execution & Operations capability & delivery location needs to change. Companies’ Workforce, Business, and Department processes are not set up efficiently

If someone can do something better than yourself, then under no circumstances, do it yourself.

John Chambers, 1998

EXECUTIVE LEVEL FEEDBACK

93%

We Understand

Recognise the need to make strategic changes in OPERATIONS, BACK OFFICE & HR, focusing on optimising the processes & reduce costs

61%

We are Aware

Feel that departments are not prepared to capitalise on transformational changes.

32%

We ask someone who knows

They considered alternative strategies and started to look into BPO solutions. DaaS would be the perfect solution to their problem.

SUCCESS FORMULA (Unique Selling Point)

  • DaaS is an industry agnostic solution, covering 8 core corporate segments.​
  • The client retains 100% control over their team and their day-to-day activities.
  • By having an employed team in Croatia, the client ends up with a 50% more affordable department than in Central, Northern or Western Europe.

ECONOMIC ADVANTAGE

  • Scalable Global Solutions is a pioneer in what it offers on the market.
  • More significant vendors do not focus on smaller businesses (96% of the total market): We Do.
  • Better than outsourcing, our solution gives the client exactly what they want: Control.
  • Our SGS ONE platform offers simplicity and ease of use in managing your teams.

How does DaaS work?

1. Client Requirements Plan

 

• Candidate specifications
• Number of employees
• Level of expertise
• Language skills
• Additional skills

2. SGS Recruitment Process

 

Global search for local placement
Recruitment network in the CEE region and globally
Filter candidates that match the job description

3. Client Selection

 

• Interview
• Evaluate
• Decide

4. SGS Integration

 

• Employing the candidates
• Payroll and local law compliance
• Dedicate office space and equipment
• Whole department = one monthly invoice

5. Client Integration

 

• New hires integrated as clients’ employees
• New team is ready and set to work
• Exclusively managed by the client

DIFFERENCE: DaaS VS OUTSOURCING

Functions & Features

DaaS

Outsourcing

Ability to build your own department filled with selected team members

Ability to change and replace team members

Ability to define the Work and Job profiles

Ability to interview the team members

Ability to select the staff

Business communication conflict

Low

High

Command over Intellectual property

Complete Control

Completely Independent

Confidentiality and Security Risk

Cost Reduction

Cultural Focus

Dedicated Office

Complete Control about the Procedures

Complete control about the process

Complete control of the department

Complete control of the people

Hidden Costs

Innovation Influence and adaptability

Loss of Control

Benefit & Quality comparison chart – DaaS vs Outsourcing

  • 6.5% - Outsourcing
  • 93.5% - DaaS
Managed Office Service

New Hire Potential Incubator

Customizable facility

Poor Quality of Service

Potential for conflict

Quality Control

Quality of work

High

Low

Tailor-made Solution

Things Get Lost in Translation

Time Zone

Transparency

EMPLOYER OF RECORD (EOR)

SGS, as the Employer of Record, enables foreign companies to quickly and compliantly commence operations in Croatia, without creating a local entity.

  • Once the client has found their new team, SGS takes care of everything,
    from hiring, onboarding, and HR administration, to legal and tax compliance
  • The client’s employees are technically on SGS payroll, but they are exclusively
    working for the client’s company.
  • Effortless payroll management – one invoice for your whole team. SGS handles
    the taxes, health and pension contributions.

SGS ONE

A practical CRM solution that shapes and supports every department Project reporting, hiring process overview, creating sales lead list
The SGS ONE can do it:


Easy implementation & navigation
Entirely cloud-based, available also on mobile
The perfect, lite alternative to other complex systems
on the market

SGS ONE, in particular, adapts to the demands of the clients’ departments and numerous sub-services across our eight key solutions It is written in our SOURCE-CODE and is ready for deployment in the clients’ subdomain in 2 weeks. SGS ONE – the new cloud solution to optimise your business.

WHY CROATIA

Excellent strategic geographical position with proximity to major
European cities

Fully integrated into the European Union – Attractive place to work and live

Access to a multilingual market

High quality of life with low Costs of Living means more affordable but equally
skilled talent

IT Hotspot – The IT industry is becoming one
of the propelling forces of the Croatian Economy

A country with a population of 4M is home to several Industry 4.0 Unicorns
such as Rimac, Infobip and Nanobit.

Favourable corporate taxation system

FIRST TO MARKET

BPO VENDORS

CRM VENDORS

RPO VENDORS

OFFICE VENDORS

sgs sgs sgs sgs sgs sgs sgs sgs sgs sgs sgs

SERVICE

CRM Vendor

BPO Provider

RPO Provider

Office Provider

 –

Dedicated staff/ not outsourced

Resource selected by the client

Resourcefully integrated

The client fully manages the service.

Virtual Dedicated workforce

Exchange of staff by client

Reduction of Operational Cost

Dedicated Office space for the client

 –

 –

 –

 –

Shared Office space for the client

 –

 –

 –

 –

 –

 –

 –

Office space for the client

Fast implementation

Complex to negotiate

Complex to implement

2022 WRAPPED

232%

YoY Growth

€450K

Investments in 2022

€60K

Monthly Revenue

15%

MoM Revenue Growth

€3M

In signed deals for 2023+

9

Clients

9

Investors

31%

Valuation YoY Growth

REVENUE MODEL

1) Direct Sale – Dedicated and experienced sales managers identify and directly approach suitable SMEs in assigned regions. The expected profit margins per deal range from 35%-42%.

2) Channel Partnership – Our Value-Added Resellers (VARs) have the ability to present our solutions to a wider market.

3) SGS ONE software license – SaaS subscription model.

BUSINESS MODEL

We sign 36-month contracts with our clients, which auto-renew once they expire. The average initial contract deal size is ~€100k per year, with 2 employees and an office. Orbis, our largest client, is currently employing a team of 8 people (developers and consultants), and the goal is to grow their Croatian division to 30. That single client would then be worth €1.2 million per year and open the possibility of cross-selling our other solutions, increasing the LTV of this client exponentially.

FINANCIAL METRICS

Average revenue per client employee 

€5,573

Monthly Recurring Revenue (MRR)

€50,000+

Average Monthly Revenue Growth Rate (MoM)

12%

Average Net Profitability per Client

35%

CLIENT CASE STUDY (36-MONTH CONTRACT)

Net Profitability

42%

Quarterly Revenue

2022 Q1

2022 Q2

2022 Q3+Q4

Number of client Employees

5

8

30

Amount in €

88,200

220,500

793,800

 

Annual Recurring Revenue

2022

2023

2024

Number of client Employees

30

60

90

Amount in €

1,102,500

2,866,500

4,630,500

FINANCIAL FORECAST

P&L (€)

2023

2024

2025

2026

2027

Revenue from Services

5.000.000

16.600.000

35.500.000

67.200.000

102.650.000

Software System Revenue

35.000

250.000

2.000.000

6.000.000

10.000.000

Investor Inflows

1.438.000

1.941.300

2.911.950

4.367.925

6.000.000

VAR Program Revenue

1.000.000

4.150.000

10.650.000

26.880.000

41.060.000

Total Revenue

7.473.000

22.941.300

51.061.950

104.447.925

159.710.000

Total Cost

-4.000.000

-13.400.000

-28.800.000

-54.500.000

-97.000.000

EBITDA

3.473.000

9.541.300

22.261.950

49.947.925

62.710.000

EBITDA Margin

46,47%

41,59%

43,60%

47,82%

39,26%

THE TEAM

Markus Borlinghaus

Founder & CEO


Inventor of DaaS
Has decades of experience in Corporate Leadership and working at executive level positions in Cisco Systems, Juniper Networks, Microsoft, Xerox and ATI.

Has co-build two startups: Peribit Networks (sold to Juniper Networks) and Whale Communications (sold to Microsoft) 

Kristina Šmidt Grancarić

Head of Sales


She oversees all revenue-generating activities, including sales, channel partnerships and development, and customer experience.

She has 20 years of international work experience in Engineering, DIY and Fashion Retail in the D/A/CH region. 

Marko Dubroja

Investment Relations Manager


Marko is an accomplished and agile startup enthusiast, leading the Investment Team. With practical industry experience, ranging from gaming to quality assurance, and a Masters’ degree in finance from VERN University, he has the “out-of-the-box” mentality to achieve his team and company goals. Marko excels at cross-department projects, organises brainstorming sessions and has helped secure critical investments for the company.

Luka Vuković

Head of Operations


Holding a master’s degree in Industrial engineering and a Google project management certificate Luka has more than 10 years of experience leading various technical teams and 5 years of experience as a hardware/software startup-company CEO, where he has built the company around his patent and led the product development from start to selling it on 3 different continents. On top of that, Luka has experience serving as a chairman and a board member in two public companies and as a president of the local basketball club where he actively played.

His drive is to build fantastic products that, eventually, millions will use.

Alexis Samohod

Head of HR


Master in Business Administration from Centrum PUCP (Peru) and Eada Business School (Barcelona), with an achieved Magna cum laude recognition and Beta Gamma Sigma (BGS) Member. Ten years of experience in HR and Recruitment for the IT, mining, and construction sectors. Managing high-performance work teams for more than 20 projects across LATAM and Europe.

INVESTMENT OFFERING

Scalable Global Solutions is looking for a €2,000,000 capital raise in exchange for 14,92% equity (regular shares)

PRE-MONEY VALUATION:………€13.087.000
NUMBER OF SHARES:……………………. 140.000
LEGAL FORM:…………….. Joint Stock Company

DISTRIBUTION OF FUNDS

The raised funds will enable us to establish SGS as the leading DaaS player in Europe.

Working Capital

40%

Operational expenses such as rent, software maintenance and salaries.

Sales Team Expansion

8,33%

Hiring experienced sales talent to cover more ground and close more deals, will bring us closer to the break-even point (Q1 2023)

Staffing and Recruiting

8,33%

Establish a functional recruitment matrix across the CEE and SEE region

Further Channel Program Development

21,67%

Find new business partners and Account Managers across Europe

R&D for SGS ONE

11,67%

Creating the SGS ONE 2.0, developing new modules, UI enhancement

Marketing

10%

Digital Marketing Campaigns, Display Marketing and PPC Marketing

BENEFITS FOR THE INVESTORS

Cash-out options in later fundraising rounds

 

Success Fee – for every new investor the existing shareholder brings on board,
we reward it with a success fee

 

Potential Exit for 2029+ with targeted returns of 25x-38x

EXIT STRATEGY

We have envisioned the following exit scenarios:

Merger
Acquisition
 IPO

 

We believe that a Merger or Acquisition by an industry-leading BPO and HR company is feasible at a stage when we have developed a significant market presence.