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COMPANY PRESENTATION
April 2019
LAIX INC. COMPANY PRESENTATION April 2019 LAIX LIFE EMPOWERED BY - - PowerPoint PPT Presentation
LAIX INC. COMPANY PRESENTATION April 2019 LAIX LIFE EMPOWERED BY - - PowerPoint PPT Presentation
LAIX INC. COMPANY PRESENTATION April 2019 LAIX LIFE EMPOWERED BY AI TO REACH (X)INFINITE POSSIBILITIES OUR MISSION: EMPOWER EVERYONE TO ACHIEVE THEIR FULL POTENTIAL AND BECOME A GLOBAL CITIZEN 1 BUSINESS HIGHLIGHTS OUR JOURNEY Beijing
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BUSINESS HIGHLIGHTS
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OUR JOURNEY
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Zheren Hu Founder / CTO / Head of English for Adults Business
- Dr. Yi Wang
Founder / CEO
- Dr. Hui Lin
Founder / Chief Scientist
Beijing Shanghai Princeton, NJ Mountain View, CA
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OUR PATH TO TRANSFORM LEARNING
2017
Launched Authentic Pronunciation course in the English Liulishuo app Launched enterprise learning services in the English Liulishuo app
E n t e r p r i s e L e a r n i n g S e r v i c e s A u t h e n t i c P r o n u n c i a t i o n
2015
Started to develop AI English teacher
2014
Launched online learners’ community Liuliba in the English Liulishuo app
2016
Launched paid courses in the English Liulishuo app Launched the IELTS Liulishuo app
2013
Launched the English Liulishuo mobile app Awarded “Selected Apps of the Year” by Apple App Store
2018
Launched LiuLi Reading course in the English Liulishuo app 50 Most Innovative Companies for 2018 by Forbes China 100 Most Promising Private AI Companies in the World for 2018 by CB Insights Listed on NYSE
Creation of AI teacher Monetization
L i u l i R e a d i n g
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Traffic Registered Users
App stores and social media platforms Word-of- mouth viral growth Offline marketing activities
Effective Customer Acquisition
Rich and engaging free content
Active Users
Multiple ways to drive conversion
OUR FREEMIUM BUSINESS MODEL
DongNi English RMB99 for 30-day access Authentic Pronunciation RMB49 for 14-day access LiuLi Reading RMB199 for 100-day access
First Purchase Repurchase
DongNi English RMB499 for 180-day access, Up to RMB998 for 12-month access Other new products ... Premium Service RMB2,880 to RMB59,880 based on course length
- r number of course units
轻松学
Free Co u rs es
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OUR GROWTH
Notes:
1 Paying users for a certain period are users who make payments for any of our courses and services during that period; a user who makes payments across different courses and services offered on the same mobile app using the same
registered account is counted as one paying user; a user who makes payments for the same course or service multiple times in the same period is counted as one paying user
2 Gross billings for a certain period are the total amount of cash received from the sale of course packages in that period, net of the total amount of cash refunds paid to users in the same period
Net Revenues Gross Billings(2)
(RMB MM) (RMB MM)
Paying Users(1)
816 2,500 2017 2018 (Thousands) 3.1x 313 987 2017 2018 166 637 2017 2018 3.8x 3.2x
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AI Teacher
Adaptive learning based on users’ proficiency levels and according to past learning and practice data Address mistakes that users make in real time
Practicing
One-size-fits-all content Real-time personalized feedback in a variety of formats through an interactive, gamified interface
Assessment
Hard to give detailed and personalized assessment Advanced auto- scoring engine and speech recognition technologies Adaptive, personalized, real- time language proficiency assessment and personalized advice
Feedback
Time consuming to give personalized feedback Adaptive learning and knowledge tracing technology to personalize learning process Natural language processing to provide feedback on questions
Teaching
Long class preparation times
Human Teacher Learning Process for Language and Most Other Subjects
OUR PROPRIETARY AI TECHNOLOGIES
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Product Development Philosophy
User Experience Supported by designers, product managers, engineers,
- ps and OSAs
Content Backed by content development team AI Technologies Supported by AI experts and scientists Feed- back Loop
Data Data-Driven Feedback Loop
Leverage learning data to improve our products Refresh course content in weeks (vs. years in traditional education) Select most effective pedagogical practices for users
Education Pedagogies Backed by renowned education experts
26.3Bn Sentences and 2.0Bn Minutes
Users Conversations Record(1)
Note:
1 As of December 31, 2018
STRONG PRODUCT DEVELOPMENT CAPABILITIES
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Social
■ Our “Liuliba” is a social community where users can create content to showcase their English skills or share study tips
Human Touch
■ Online Study Advisors (OSAs) monitor and encourage users in Wechat-based study groups ■ Maintains human touch in learning process
Real-time Feedback
■ Users can receive real- time performance feedback to track their progress and view their rankings on leader boards ■ Motivates users to share their learning progress
Gamification
■ Gamified exercises/ texts to recap what has been learned ■ Visualized learning progress to motivate users
Pop Culture
■ Lessons in pop culture themes ■ Makes learning interesting
ENGAGING USER EXPERIENCE
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FINANCIAL HIGHLIGHTS
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71 816 2,500 400 1,000 2016 2017 2018 2017 Q4 2018 Q4
Gross Billings Paying Users
RAPID GROWTH IN GROSS BILLINGS DRIVEN BY PAYING USERS GROWTH
25.7 313.0 986.6 132.2 359.0 2016 2017 2018 2017 Q4 2018 Q4
(RMB MM) (Thousands)
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12.3 165.6 637.2 76.1 224.5 2016 2017 2018 2017 Q4 2018 Q4 12.8 116.4 477.6 2016 2017 2018
Net Revenues Revenue Recognition Method
FAST GROWING NET REVENUES AND HIGHLY VISIBLE FUTURE REVENUES
Gross Billings This year Net Revenue This year
(RMB MM)
Deferred Revenues
(RMB MM)
Gross billings recognized as net revenues this year Deferred rev. recognized as net revenues this year Addition to deferred revenues Deferred revenues Ending balance Deferred revenues Beginning balance
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14 (27.5) (57.7) (174.7) (21.6) (71.7) (223.0)% (34.8)% (27.4)% (28.4%) (31.9%) 2016 2017 2018 2017 Q4 2018 Q4 Cost of revenues As % of net revenues
HIGHLY SCALABLE BUSINESS MODEL WITH IMPROVING OPERATING LEVERAGE
(705.4) (28.5) (283.1) (136.2) (241.7) (231.4)% (171.0)% (110.7)% (179.1)% (107.7)% 2016 2017 2018 2017 Q4 2018 Q4 Sales and marketing expenses As % of net revenues
Cost of Revenues Sales and Marketing Expenses
(RMB MM) (RMB MM)
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HIGHLY SCALABLE BUSINESS MODEL WITH IMPROVING OPERATING LEVERAGE (CONT’D)
(30.0) (53.2) (155.2) (21.6) (53.7) (243.4)% (32.1)% (24.3)% (28.4)% (23.9)% 2016 2017 2018 2017 Q4 2018 Q4 Research and development expenses As % of net revenues (8.8) (19.8) (65.4) (7.8) (17.1) (71.0)% (12.0)% (10.3)% (10.2)% (7.6)% 2016 2017 2018 2017 Q4 2018 Q4 General and administrative expenses As % of net revenues
Research and Development Expenses General and Administrative Expenses
(RMB MM) (RMB MM)
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Loss from Operations Adjusted Net Loss
(RMB MM) (RMB MM) (82.5) (248.2) (463.5) (111.1) (159.7) (668.8)% (149.9)% (72.7)% (146.1)% (71.2)% 2016 2017 2018 2017 Q4 2018 Q4 Loss from Operations Operating Margin (84.6) (234.2) (442.6) (108.6) (157.0) (686.4)% (141.5)% (69.5)% (142.8)% (69.9)% 2016 2017 2018 2017 Q4 2018 Q4 Adjusted Net Loss Adjusted Net Margin