FY2024/5 Financial Results for Q3

株式会社 Gunosy
Gunosy Inc.
TSE
(6047)
東 証Primeプライ
ム （証券コード：6047）

1. Financial Highlights

P 03

2. Upward Revision of Full-Year Forecasts andReturns to Stockholders

INDEX

P 06

3. Financial Results for FY2024/5 Q3

P 12

4. Business Overview by Division

P 17• Media Business• Game8• Investment (slice)

5. Other Topics

P 29

6. Reference Materials

P 32（C） Gunosy Inc. All Rights Reserved.

2

Financial Highlights（C） Gunosy Inc. All Rights Reserved.

3

Executive Summary (1/2)

Consolidated operating profit improved significantly QoQ due to the recovery of
programmatic advertising profitability in the Media business as well as revenue
growth at Game8. As a result, we achieved profitability in Q3 (Dec. 2023 - Feb.
2024).

UpwardrevisionSharebuyback

The full-year forecast has been revised upwards as theGame8 business has performed better than originally
expected.

Using the proceeds from the sale of Smarprise, we
repurchased 100 million yen worth of shares as a measure
to return profits to shareholders.

（C） Gunosy Inc. All Rights Reserved.

4

Executive Summary (2/2)
Q3 (Dec 2023 – Feb 2024)

Net sales

1,920

Operating profit

93

million yen YoY 90.7％

million yen YoY---％(Million yen)

Net sales

Operating profit

Gunosy

1,115

-74

Game8

572

190

Others232-22(Million yen)

Net sales

Operating profit

Gunosy

3,414

-455

Game8

1,530

394

Others705-50

Q1-Q3 (Jun 2023 – Feb 2024)

Net sales

5,649

Operating profit-112

million yen YoY 93.5％

million yen YoY---％（C） Gunosy Inc. All Rights Reserved.

5

Upward Revision of Full-Year Forecasts andReturns to Stockholders（C） Gunosy Inc. All Rights Reserved.

6

Revision of FY2024/5 Results Forecast (Consolidated)
Regarding the forecast for consolidated results for the full year, operating profit was revised upwardfrom the revised Q2 forecast of - 260 million yen to -30 million yen, taking into account theconsolidated results for the third quarter. The amount of loss for the current period was also reduced fromthe revised Q2 forecast due to the sale of Smarprise.
(Million yen)

FY2024/5
Q1-Q3(Jun 2023 – Feb
2024)

Initial forecast(full-year)

Revisedforecast(full-year)

Increase /decrease

Progression
rate

Net sales

5,649

7,200

7,290

1.3%

77.5%

Operatingprofit

-112

-260

-30

-

-

Operatingmargin

-

-

-

-

-

Ordinary
profit-859-1,304-1,044--

Profitattributable toowners ofparent-913-1,648-1,170--（C） Gunosy Inc. All Rights Reserved.

7

Consolidated Operating Profit
In Q1, an operating loss was recorded on a consolidated basis due to increased advertising investments.
However, from Q2 onwards, advertising investments were reduced, the profitability of the Media businessrecovered and the Game8 business remained strong, resulting in a return to profitability in Q3. We also
expect to be profitable in Q4 and believe that we can continue to generate operating profits in the
future.

FY2024/5
Q1

Q2

Q3

Q4 (planned)

FY2025/5

Operating profit

93

82
A corporate structurethat enables

0△ 20
Factor(s)contributing toimprove
ment

△ 185

continued
profitability❶ Improved profitability of theMedia business❷ Strong Game8 business❸ Reduced advertising investment（C） Gunosy Inc. All Rights Reserved.

8

Acquisition of Treasury Stock upon Transfer of Smarprise
SharesIn connection with the sale of Smarprise, a gain on sale of shares of subsidiaries and associates of 386
million yen was recorded in the consolidated financial statements, while the cash-based return generated
was 295 million yen. It was decided to use approximately 34% of the proceeds, or 100 million yen, torepurchase shares.
Consolidated financial
statements

Cash-base

A gain on sale of shares of subsidiaries
and associates recorded in the

Return on a cash basis, net of book valueof investments and acquisition costs, wasconsolidated financial statements related
to the sale of Smarprise

295 million yen.

Gain on sale ofshares of
subsidiaries andassociates

Return on a cashbasis

386 million

295 million

yen

yen

Book value on consolidated
financial statements

Amount used for repurchase oftreasury stock

100 million yen
Approx. 34% of the return ona cash basis

Book value ofinvestments andacquisition costs（C） Gunosy Inc. All Rights Reserved.

9

Policy on Future Return to Shareholders*1

Investment status is comprehensively evaluated based on IRR and other indicators. Our policy is toreturn a certain percentage to shareholders as cash-based returns are generated in the future. It isalso our policy to manage the capital invested in the business efficiently, focusing on capital efficiency
and earnings growth rate.

Total assets in the consolidated balance sheet

PolicyInvestment

Business

Comprehensively evaluatedbased on IRR and otherindicators

Manage assets focusing on
capital efficiency and profit
growthReturn a certain percentage to shareholders as cashbased returns are generated in the future*2

PolicyWe will promote the use of capital in a manner that
increases the rate of earnings growth, based on thepremise of achieving a certain level of capital efficiency.

Evaluated based on IRR
and other indicators

Sale of Smarprise

Acquisition of Smarprise

We are committed to achieving sufficient capital efficiency in both investments
and operations to increase the value of our shares over the medium to longterm.
*1: Provide an overall assessment of the extent to which the expected returns assumed at the time of investment have been exceeded, including measurement using
IRR and other indicators.
*2: Our policy for strategic investments in subsidiaries and affiliates is to evaluate them on a comprehensive basis using IRR and other indicators in cases where they
are subsequently sold, as was the case with Smarprise. The return to shareholders upon sale of the investment will be determined by reference to the Smarprise case.
（C） Gunosy Inc. All Rights Reserved.

10

Progress towards Achieving Consolidated and Nonconsolidated Operating Profitability in FY2025/5

1

We will continue our basic policy of achieving consolidated
and non-consolidated operating profitability by FY2025/5.

2

Consolidated operating profit of 93 million yen was achieved in Q3, supportedby the growth of Game8. We expect to achieve consolidated operating
profit in Q4 as well, and believe that we are well positioned to achieve
consolidated operating profit in the next fiscal year as well.

3

We aim to return Gunosy Inc. to operating profitability on a non-consolidated
basis through continued efforts to increase productivity by improving
profitability and controlling advertising investment within the IRR threshold.

4

The details of the Gunosy Group's overall business policy will beannounced at the time of the release of the year-end financial results inJuly 2024.
（C） Gunosy Inc. All Rights Reserved.

11

Financial Results for FY2024/5 Q3（C） Gunosy Inc. All Rights Reserved.

12

FY2024/5 Consolidated Results for Q3
We achieved a return to profitability in consolidated operating profit in the third quarter (Dec. 2023Feb. 2024), driven by the continued strong performance of the Game8 business, as well as a recovery in
the profitability of the Media business and control of advertising investments.

(Million yen)

FY2024/5
Q3

FY2024/5 Q1-Q3(Jun 2023 – Feb 2024)

FY2023/5
Q1-Q3

YoY

103.8%

5,649

6,045

93.5%

-20

-

-112

-156

-

4.9%

-

-

-

-

-

Ordinary profit

-107

-226

-

-859

-1,233-

Profit attributable toowners of parent

104

-304

-

-913

-492

-

FY2024/5 Q2

QoQ

1,920

1,849

93

Operating margin(Dec 2023 – Feb 2024)

Net sales
Operating profit（C） Gunosy Inc. All Rights Reserved.

13

Breakdown of Net Sales*1

Game8 sales increased both YoY and QoQ.
In Gunosy Ads, the profitability of programmatic advertising recovered, leading to a QoQ increase inrevenues.
OthersGame8
ADNW
Gunosy Ads*2(Million yen)

2,400

221
203
246

275

375

371

262

153

441
451

366
1,600

192

168

435

267

254

260

800

194

457

390

420

227

247

142

257

203

295

244

369

381

470

445

201

168

140

119

1,267 1,198 1,189

1,526 1,403
1,492
1,334 1,352
1,214 1,248 1,209 1,197

Q1

Q4

280

295

271

456

501

572

110

88

67

1,018

987

999

Q1

Q2

Q3

0

Q2

Q3

FY2021/5

Q1

Q2

Q3

FY2022/5

Q4

Q1

Q2

Q3

FY2023/5

Q4

FY2024/5*1: Sales of Gunosy Ads, ADNW and Game8 are presented on a nonconsolidated basis. Internal trade adjustments are included in Others（C） Gunosy Inc. All Rights Reserved.
*2: Sales of Gunosy Ads are the total of “Gunosy”, “NewsPass”, “au Service Today” and “LUCRA” (Service ended in February2023).

14

Cost Structure
Advertising expenses were unchanged QoQ, reflecting continued restraint in line with previous policy.
Other costs were tightly controlled and did not change significantly.

(Million yen)

2,304

2,400

2,135

2,048

2,085

2,010

1,974
1,866
540

1,600

2,187 2,176

1,090

810
779

515

920
370

334

537

1,869 1,826

580
561

348

800

153
93

152
88

318

375

371

64

36

39

518

515

538

389
39

583
535
128
278
0

Q1

513

575

550

639

668

673
628

419
330

153
94

2,080 2,110 2,118 2,066

227
39
607

197
37
629

331

288
40
624

301

282
39
630

307

238

297

317

36

36
610

193
38
601

236

202
37

*

Advertising expenses
Rent expenses on landand buildings
Personnel expenses

586
Server expenses

121

111

115

109

118

114

114

182

187

195

186

168

181

186

107
146

120
125

116
102

116
87

108
79

112
64

101
48

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY2021/5

Others
Revenue sharing

230

603

613

FY2022/5

FY2023/5

Ad network costs

FY2024/5* “Revenue sharing” included in “Others” in FY2021/5 and earlier, but separated from “Others” from FY2022/5 Q1.
“Live video production expenses” is included in “Others” from FY2022/5 Q1.

（C） Gunosy Inc. All Rights Reserved.

15

Equity Method Investment Gains/Losses of slice
The stable organic growth of the business continues with appropriately controlled marketing investments,
resulting in a decrease in the amount of losses. Equity method investment losses are also on a declining
trend.

Equity method investment gains/losses of slice *FY2023/5(Million yen)

Q1

Q2

Q3

FY2024/5
Q4

Q1

Q2

Q3

△ 225

△ 205

0

△ 218
△ 286
△ 373

△ 300

△ 337

△ 549

Product transition
period(Sep-Dec 2022)

Releasenew
product△ 600(Dec 2022)* The share of gains (losses) of entities accounted for using the equity method includes various expenses including amortizationof goodwill, in addition to the incorporation of the gains/losses from the respective entities.
（C） Gunosy Inc. All Rights Reserved.

16

Business Overview by Division

Media Business（C） Gunosy Inc. All Rights Reserved.

17

*
Total Number of Active
Users (MAUs)Media BusinessIn Q3, the size of the media was maintained QoQ, while advertising investment was kept under control.

LUCRA (Service ended in February 2023)
NewsPass + au Service Today
GunosyQ1

Q2

Q3

FY2021/5

Q4

Q1

Q2

Q3

FY2022/5

Q4

Q1

Q2

Q3

Q4

FY2023/5*Average for each quarter of MAUs (monthly active users) of "Gunosy", "NewsPass", "au Service Today" and "LUCRA".

Q1

Q2

Q3

FY2024/5（C） Gunosy Inc. All Rights Reserved.

18

Media Business

Progress Summary of Gunosy's Key KPIs

Profitability continued to recover on the back of algorithmic improvements implemented in Q2, with S/Dfollowing an upward trend QoQ. While DAUs increased YoY driven by a favorable retention rate, DAUs
declined slightly QoQ due to continued control of advertising expenses.

Gunosy SalesDAU *1
YoY

101％

Sales/DAU

QoQ

99％

YoY

83％

102％

QoQ

*2
Retention rate

Cumulative downloads
YoY

106％

YoY

107％

QoQ

101％

QoQ

100％

Product side

Good

Marketing*1: Daily Active Users*2: The app retention rate refers to the percentage of newusers who activate the app after a certain period of time.

AdImp/DAU

*3

*4

CPM

(Not disclosed)(Not disclosed)

Sales side

Improved

Sales activities*3: Number of ads served per daily active user
*4: Cost Per Mille（C） Gunosy Inc. All Rights Reserved.

19

Media Business

Gunosy: Advertising Expenses and Estimated IRR

Since November 2023, the IRR has remained well above the criteria due to the control of advertising
investment and improved profitability. We will continue to control the level of advertising investment fromMarch 2024. The IRR for February was below the criteria because the budget was brought forward in
anticipation of higher acquisition costs in the following March, when advertising demand is seasonally high.
Advertising expenses (actual)

Estimated IRR and advertising expenses

Estimated IRR(Three-year IRR estimated from acquisition costs (CPI)and estimated marginal profit per user)

POINT

Product KPIs
maintained postCriteria

improvement levels.
The estimated IRR
exceeded the criteria in
November to January

2022

2023

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

due to the recovery of
S/D.

2024

（C） Gunosy Inc. All Rights Reserved.

20

Business Overview by Division

Game8（C） Gunosy Inc. All Rights Reserved.

21

Game8 (Sales and Operating Profit)

Game8

As was the case in the second quarter, sales in the Media business grew significantly, both domesticallyand internationally, driven by strong PVs and a significant improvement in profitability. As a result, sales
and operating profit reached record levels.

Sales(Million yen)

572

600

435 441 451
400

390

366 375

420

470

457

501
445 456369 381

191
200

151
108

111

127

136
97

109

129

123
28

87

91

Q4

Q1

111

48

0
Q1

Q2

Q3

Q4

FY2021/3

Q1

Q2

Q3

FY2022/3

Q4

Q1

Q2

Q3

FY2023/3※FY2024 Q3 results are for the period from October to December 2023 due to a gap with the parent company's

consolidated accounting period.

Q2

Q3

FY2024/3（C） Gunosy Inc. All Rights Reserved.

22

Key KPIｓof Game8

Game8* significantly, in part due toPVs, one of the most important KPIs, remained strong. RPM has improved
improvements in overseas eCPM.

PVs

RPM

Although there was some volatility
depending on game title sales, pageviews remained strong.

Q1

Q2

RPM remained strong, partly due toimproved profitability in overseas
media business.

Q3

FY2024/3•

RPM (Revenue per Mille): Revenue per 1,000 impressions of advertisement

Q1

Q2

Q3

FY2024/3（C） Gunosy Inc. All Rights Reserved.

23

Business Overview by Division

Investment(slice)（C） Gunosy Inc. All Rights Reserved.

24sliceLatest Update

On March 12, 2024, Competition Commission of India (CCI) approved the merger of GaragePreneurs
Internet, which operates "slice", with NESFB (the "Merger").

Application to CCI• In India, prior approval from the CCI is required
for mergers and acquisitions exceeding certain
thresholds.
• As the Merger exceeded the above thresholds
and was a transaction requiring CCI approval, anapplication was filed.
• On March 12, 2024, a public announcement wasmade on the website of the CCI regarding theapproval of the Merger.

Source: https://www.cci.gov.in/combination/press-release/details/371/0（C） Gunosy Inc. All Rights Reserved.

25sliceProgress of the Merger Process

The merger process is progressing well with the filing of the application with the NCLT (National
Company Law Tribunal) completed. The only major process remaining for the merger is the approval of
the NCLT.

September 2023

March 2024

April 2024

l Completel Closingl Not completed (in progress)
RBI(Reserve Bank ofIndia)NCLT(National Company
Law Tribunal)

Other regulatory
proceduresl RBI approvall Submission of application to NCLT
NCLT Approval Process※l NCLT approvall CCI approval

The NCLT approval process generally takes 6-12 months from application to approval, although the timeline may vary and exceed this range
depending on the individual case.

（C） Gunosy Inc. All Rights Reserved.

26

sliceAUM

The customer base was significantly expanded through marketing investments until the first half of2022. Since the launch of a product compliant with the Digital Lending Guidelines in December 2023,"slice" has expanded its business scale while appropriately managing its burn rate by acquiring
customers through organic growth.

Rapid growth through marketing investments based onabundant funds raised

Response to
guidelines（ 22/9-12 ）Stable growth using only organic
approaches

AUM (assets under management)

Acquire full PPI
licenseLaunch new
product

2021

2022

Ju
l
Au
g
Se
p
O
ct
N
ov
D
ec
Ja
n
Fe
b

Ju
l
Au
g
Se
p
O
ct
N
ov
D
ec
Ja
n
Fe
b
M
ar
Ap
r
M
ay
Ju
n

Stablegrowthusing only
organic
approaches

Ju
l
Au
g
Se
p
O
ct
N
ov
D
ec
Ja
n
Fe
b
M
ar
Ap
r
M
ay
Ju
n

Fe
b
M
ar
Ap
r
M
ay
Ju
n

Rapid
growththroughmarketinginvestment
s

2023

2024

（C） Gunosy Inc. All Rights Reserved.

27

sliceFuture Policy

Our goal is to become profitable in “slice” business and maintain a healthy financial position, while
continuing to steadily increase AUM through organic growth. After the merger with NESFB, we aim tofurther accelerate growth by providing customers with a comprehensive digital financial experience.

Prior to merger
As in the past, we aim to make the business profitable by maintaining stable
growth through an exclusively organic approach, while at the same time*

reducing costs. We will also maintain a sound financial position bycontinuously controlling risks such as bad debts.

After merger
The merger with NESFB will allow us to operate "slice" under a banking license.

We aim to further accelerate our growth by offering a wide rangeof financial products.
* The financial position is solid, with an equity ratio of over 50% as of March 31, 2023. See page 48 for details.
（C） Gunosy Inc. All Rights Reserved.

28

Other Topics（C） Gunosy Inc. All Rights Reserved.

29

New Business

LLM (Udekiki)"Udekiki," our generative AI service, supports all organizations looking to leverage internal IT and drive
digital transformation. A new feature has been added to the service, which answers questions andsummarizes the results based on uploaded PDF documents.

Topics in Q3
New features added to support business
operations
1

PDF Summaries

2

PDF Research AssistantSummarize PDF content and extract key points
and gist

Analyze PDF files and provide appropriate answers
when you enter questions about the file's content（C） Gunosy Inc. All Rights Reserved.

30

New Business

Reorganization of the Business Portfolio

In order to reorganize the business portfolio, it was decided to discontinue the ad network business andthe YOU IN service.

Reorganization of the Business Portfolio

Ad network business

YOU IN

Deliver ads that can be targeted directly to users
using Gunosy's proprietary user data.

"YOU IN" is a D2C brand that provides an experience of
acceptance, sharing and affirmation of your current moodand state through "mood pairing“.

Starting a business: June 2014

Starting a business: June 2021

End of business: June 2024

Business end: April 2024
（C） Gunosy Inc. All Rights Reserved.

31

Reference Materials（C） Gunosy Inc. All Rights Reserved.

32

MISSION

Optimally
information
arounddelivertopeopletheworld（C） Gunosy Inc. All Rights Reserved.

33

Company History
November 2021
Achieved unicorn status in the
fintech sector by raising
significant funds in its Series B
funding round

June 2016“NewsPass” released

November 2012

July 2018
Established Gunosy Capitaland started investment
business

Established Gunosy Inc. in
Roppongi, Minato-ku, Tokyo

2012

2015

2016

April 2015
Listed on the Mothers
Section of the Tokyo Stock
Exchange
December 2015
Game8 Inc. became
subsidiary

2017

2018

2019

December 2017
Changed markets from Mothers
Section to First Section of theTokyo Stock Exchange(Currently listed on TSE Prime)

September 2019
Started investment in
GaragePreneurs
Internet Pvt

2021

2022

April 2022
Became an equity
method investee by
dispatching a director
April 2021
Launched "au Service
Today" service（C） Gunosy Inc. All Rights Reserved.

34

Gunosy Group Business Portfolio

Medium- to long-term growth driven by three businesses
12Media business•••

GunosyNewsPass
Au Service Today

Game8 group
•

Game8

DATA

•

•
•
•

3

＋

Investment

Newbusinesses

Gunosy Capital•

LLM

Data accumulated since the inception of the company
Knowledge of algorithms
Media and advertising expertise, etc.

（C） Gunosy Inc. All Rights Reserved.

35

Growth Image

Increase corporate value through growth of existing businesses anddevelopment of new businesses

Aim for group-wide growth with a market
to long-term target

Investment

capitalization of 100 billion yen as a medium-

Game8Media business

Established（C） Gunosy Inc. All Rights Reserved.

36

Overview of Gunosy Inc.

Basic Information
Company name:Gunosy Inc.

Representative:

Shinji Kimura

Representative Director and Chairman,
Officers: Group Chief Executive Officer (CEO),
Shinji Kimura

Yuya Taketani

Representative Director and President,
Kentaro Nishio

Established:

November 14, 2012

Director and Chief Investment Officer (CIO),
Yuki Maniwa

Fiscal year end:May

Director, Yuya Taketani

Capital:Director, Masaaki Nose

Stock Code:4,099 million yen (as of the end of
February 2024)
6047 (TSE Prime)

Audit corporation:

Ernst & Young ShinNihon LLC

Director (Outside), Junichi Shiroshita

Number of
employees:

221(as of the end of February 2024, on aconsolidated basis)2-24-12 Shibuya, Shibuya-ku, Tokyo

Director (Outside), Hirokazu Mashita

Head office:Business:

Development and operation of information
curation service and other media

Director (Outside), Suguru Tomizuka

Director (Outside), Lei-Isabelle Nakao
Corporate Auditor, Masakazu Ishibashi
Corporate Auditor (Outside), Kenji Shimizu
Corporate Auditor (Outside), Kengo Wada（C） Gunosy Inc. All Rights Reserved.

37

From “Gunosy Way” to “Gunosy Pride”
The concept of "Gunosy Way", which had been defined as a milestone for Gunosy to follow, wasredesigned as "Gunosy Pride“, which inherits the original thoughts and concepts.

1“Triple win” philosophy
Benefit the customer, the user, and the world. Benefit yourself, others, andyour fellow employees. We will continue to create a cycle of goodness not
only outside the company and society, but within our company as well.

2

Creating opportunities with science
We will use data and technology to accelerate innovation with facts. We will
also use science to solve social issues.

3

Centennial quality
We do not stop working until we feel that this is the best we can do, rather
than thinking that this is good enough. We will face the work in front of us
with sincerity and honesty, seeking quality that will endure for a hundredyears.

4

Respond to adversity in a positive way
There are as many adversities as there are challenges. However, we
believe that it is the adversity that brings us the opportunity for growth. We
will not run away from the obstacles in front of us, but rather we will
aggressively pursue our business in adversity.

（C） Gunosy Inc. All Rights Reserved.

38

Status of the Estimated Value ofthe Investment Portfolio (Disclosed on July 14, 2023)
FY2019/5

FY2020/5

FY2021/5

FY202/5

FY2023/5

0.98

0.99

1.11

5.36

5.16

Investment
ratio(Million yen)
*1

26,54625,741

Accumulated investment*2「累計投資額」と“Accumulated「推定評価額＋売却額」
investment” and“Estimatedの推移（累計）value + Sale
price”

Estimated value + Sale price

253

249

813

808

1,867 2,068

5,140

4,805

Investm
ent

Japan

30

259

770

880

1,090

(accumulat
ed)

India

223

553

1,097

3,924

4,049

Market
value

Japan

30

259

776

1,037

1,357

(accumu
lated)

India

218

547

1,291

24,70325,188*1. Accumulated investment: Calculated in yen at the exchange rate at the time of investment. Includes investments in issues already sold.
*2. Estimated value: Value that we estimated as the price at which shares, etc. would be transferred in an arm's-length transaction, based on the following method. Note that such estimatedvalue is generally not based on the results of a valuation report by an external third party or an audit by an accounting auditor, but is calculated by us at our own discretion.
(1)
(2)
(3)

Issues that raised funds in a recent funding round: The estimated valuation is the valuation at the time of the relevant round, with a 20.7% illiquidity discount applied.
Issues for which an external third-party valuation was previously obtained: The estimated valuation is based on such valuation.
Other issues: Valued at book value at the time of investment. For those acquired in foreign currency, the value is converted at the most recent exchange rate.

（C） Gunosy Inc. All Rights Reserved.

39

Reference Materials (slice)（C） Gunosy Inc. All Rights Reserved.

40

Relationship with “slice”

slice

Since 2019, we have invested a cumulative total of over 3 billion yen in slice. In April 2022, we
dispatched a director, making it an equity-method affiliate.

2015 Jun

GaragePreneurs Internet Pvt Ltd., which operates"slice" established
Percentage of ownership by the
Gunosy Group2019 Sept

Initial investment

2020 Jun

Second investment

2021 Jun

Third investment (approx. 15 million USD)

Nov

2022 Feb

17%

Enterprise value exceeds $1.5

billion in Series B1 round"slice" achieved unicorn status by raising
significant funds in its Series B funding round

Became our affiliate

4th investment (approx. 10 million USD)

Our CIO was dispatched as

Jun

Became an equity method investee of Gunosy by dispatching a
director“slice” raised approx. $50 million in its Series B1 round

Sep

Digital Lending Guidelines issued by RBI *1

Dec

New products released in compliance with Digital Lending
Guidelines (December 1-)

Aprapprox.

a director.

Director and Chief
Investment Officer (CIO)

Yuki Maniwa

To strengthening thecollaboration between
the two companies,“slice” became an
equity-method affiliateof the Gunosy Group.

*1: For more information on regulations governing personal credit, see:https://rbidocs.rbi.org.in/rdocs/notification/PDFs/GUIDELINESDIGITALLENDINGD5C35A71D8124A0E92AEB940A7D25BB3.PDF（C） Gunosy Inc. All Rights Reserved.

41

Company Overview

sliceFoundation

Amount raised to date2015

Approx.

$290 million(Cumulative amount)

Major shareholders
GunosyMost recent financial statements(P/L and B/S) (FY2023/3)
Sales

Profit (loss)
before income
taxes

15.2 billion
yen-7.1 billion
yen

TIGER
GLOBAL

INSIGHTPARTNERS

Number of employees

Over 1,500（YoY 296%）
Total assets

33.9 billion yen（C） Gunosy Inc. All Rights Reserved.

42

Company History

sliceFounded in 2015, “slice” expanded its digital payments business by focusing on BNPL (Buy Now Pay
Later), which was not widely used in India at the time. Since then, slice has grown dramatically and finallybecame a unicorn in December 2021.

Transforming the financial
experience for billions of Indians
Before founding slice, Rajan launched Mesh, a furniture startup that allowed customers to rent items for asmall monthly fee and buy them whenever they wished. Later, he joined the product team at Flipkart, theIndian e-commerce giant now owned by Walmart, where he helped launch the Marketplace, thecompany's fastest-growing major business at the time. Through these experiences, Rajan came tounderstand the importance of credit cards as a financial tool, which led him to found "slice" to help highly
motivated young people like himself.
An alumnus of IIT Kharagpur, Rajan was named to the Forbes Asia 30 under 30 list for 2021 and theForbes India 30 under 30 list for 2022.In his personal life, he is a basketball enthusiast and a passionate
fan of the NBA's Los Angeles Lakers.

CEO

Rajan Bajaj
Founding phase
Started rental business ofgaming consoles, cameras
and bicycles, etc.

Pivot phase
Integrate buy-now-pay-later(BNPL) into existing rental
services to give customers
BNPL experience.

Expansion phase
Company's valuation
exceeded $1 billion andbecame a unicorn.

Current state
In December 2022, newproduct was released incompliance with RBI's Digital
Lending Guidelines. In
October 2023, RBI approval
was obtained to merge with alocal bank.
（C） Gunosy Inc. All Rights Reserved.

43sliceslice inc. Business Description"slice" is India's leading fintech company providing payment services. It offers intuitive and easy digital
payments and is highly supported by Millennials and Gen Z, the largest segment of the population. With
more than 15 million users, slice is the market leader and growing its business.

Service overview

slice account• Add money to your slice account and pay by card or UPI• Get instant and valuable rewards on all transactions• Pay bills, set up subscriptions and view details of yourspending

slice borrow• Complete the application process online and the loan will beprocessed• No interest if repaid within one month• Borrow up to 1 million rupees (approximately 1.8 million yen),
repayable in 36 months• Flexible repayment options. Repay early, which can help you saveinterest（C） Gunosy Inc. All Rights Reserved.

44slice Business Environment

slice

In India, credit card penetration is low compared to other countries, leaving significant room formarket growth.

Digital payment transactions
volume in India

Credit card penetration

Digital consumer lending

Number of digital
payments growing

Credit card penetrationis only around 6% ofTotal digital consumer
lending expected to

rapidly

the population*1

triple by 2030

1,346(100 million payments)

USD 720 billion

CAGR
45%

CAGR

22%
Penetration

6%

207

2017

2018

2019

2020

2021

Over

80%

USD 190 billion

2022

2022

Source: The Press Information Bureau of India

Penetration

Source: Mynavi and GAO

2030

Source: nc42

*1：Total Population of India in 2022: Ministry of Foreign Affairs
Number of credit cards issued: Statistical figures released by Reserve Bank of India in December
Number of credit cards issued (81,186,874) / Total population of India (1,417.17 million)（C） Gunosy Inc. All Rights Reserved.

45

ビジネス
slice

slice’s Strengths”slice” boasts a strong brand image that is highly supported by the Millennial Generation Z, thevolume segment of the population. Low default rate is achieved through its unique credit expertise.

1

Appeal to the younger generation, the volume segment of the
population, with the strength of its brand through its unique andsuperior products.

2

Extend credit with low default rates to those who have been
unable to obtain credit cards in the past through its uniquecredit underwriting expertise.

3

A management team that includes professionals who have held
key positions at major global companies and are capable ofdelivering high performance on both offense and defense.

（C） Gunosy Inc. All Rights Reserved.

46

slice P&L: Sales and Profit /Loss before Income Taxes

slice(Million yen)

15,273

Sales
Profit (loss) before income taxes

FY2023/3 highlights

Sales
CAGR

211%
FY2019/3 – FY2023/3

162
▲ 174

715
▲ 17

FY2020/3

Million yen

YoY

296％

Profit (loss) before income taxes

1,200
▲ 148

Gunosy made an
initial investment
in Sep. 2019
FY2019/3

5,155

15,273-7,123

Million yen

YoY

ー％

▲ 4,392▲ 7,123
FY2021/3

FY2022/3

FY2023/3

CAGR (FY2019/3 – FY2023/3)

211%

For simplicity, exchange rates as of November 30, 2023 are applied across the board.
Source: https://www.mca.gov.in/mcafoportal/getCertifiedCopies.do https://www.sliceit.com/corporate-governance/（C） Gunosy Inc. All Rights Reserved.

47sliceslice B/S (As of the End of FY2023/3)

Total assets as of March 31, 2023 were 33.9 billion yen. The company is in sound financial condition, withan equity ratio of more than 50%.

As of March 31, 2023 (Million yen)
Current asset

30,448

Liabilities

16,728
Total assets: 33.9 billion yen
Equity ratio: Over 50%
Net assets

17,172
Non-current assets

3,453

Total assets: 33,901
For simplicity, exchange rates as of November 30, 2023 are applied across the board.
Source: https://www.mca.gov.in/mcafoportal/getCertifiedCopies.do https://www.sliceit.com/corporate-governance/（C） Gunosy Inc. All Rights Reserved.

48

Overview of Merging with slice

sliceThis merger is an extremely important step in increasing slice's growth potential.
Gunosy will continue to support slice as a corporate shareholder after the merger.

Overview of the merger

NESFB

Small finance bank operating primarily
in northeastern India••

Company nameNorth East Small Finance Bank Ltd.

Head office

1st & 3rd Floor, Fortune Central , Basisthapur, Bye lane 3, Beltola
Guwahati, Assam 781028,India

Representative

Rupali Kalita（Managing Director & CEO）

Business

Banking service

Capital3,468 million Indian rupees (as of June 26, 2023)

Founded in July 2016, with revenues of INR 3,352 million and total
assets of INR 27,104 million in FY2023/3.
Small Finance Banks are a specific type of financial institution createdby the RBI in 2014 with the objective of providing financial services tosmall businesses and others in the underserved and unbanked areas ofIndia in an inclusive manner.

Comment
Director and Chief
Investment Officer (CIO)

Yuki Maniwa

Merger will deliver a morecomprehensive digital financial
experience

1. Prior to this RBI approval, we had acquired a 10% stakein NESFB to strengthen our relationship.
2. RBI approval acquired for the merger.
3. The merger will become effective only after obtaining
the approval of the National Company Law Tribunal(NCLT) and the shareholders as required under the
Indian Companies Act. Upon* completion of theseprocesses, the merger will be consummated.
4. The merger will enable "slice" to operate under abanking license, which is expected to significantly
enhance its growth potential in the medium to long term.
(e.g. issuance of credit cards under its own brand,
management of deposit accounts, etc. will become
possible).
5. Gunosy will also acquire shares in the post-merger
company. Dilution of shares as a result of the merger is
expected to be limited.

The digitization of the business will enable the delivery of a high level of "user experience" services tousers across India. It will also enable advanced risk management using data science technology. As aresult, we expect to be able to leverage the strengths of both companies to create an unparalleledposition in India.
（C） Gunosy Inc. All Rights Reserved.

49slice(Reference) Schedule since Guideline Release

Changes were made to ensure that the product experience was compliant with the Reserve Bank ofIndia's (RBI) Digital Lending Guidelines, and the new product was released on time. The transition to thewent smoothly with no major issues.

September 2, 2022

Digital Lending Guidelines issued

November30, 2022
2022年11⽉30⽇

Deadline for updates to adhere to the Guidelines

From December 1,
2022

New product experience launched that complies with theDigital Lending Guidelines（C） Gunosy Inc. All Rights Reserved.

50