Digital Garage, Inc.

Medium-term Plan
（FY2024.3 - FY2028.3）
2023.5.11

Generated by MidjourneyDesigning “New Context” for a sustainable societywith technology

In formulating the Mid Term Plan / Introduction
Since its establishment in 1995, DG has seen and embodied the transition of the IT/internet industry for
28 years. Today, the tsunami of new technologies such as web3 (Blockchain) and Next-generation AI
including Gen AI (Generative AI) will change the "IT business ecosystem" on an unprecedented scale.
Those are,The "advertising-centered business ecosystem" dominated by search engines will be partially orcompletely replaced by a new business ecosystem of "chat-type search and image search" using
Gen AI as a gateway. This will also start the new era of AI concierges, which can be called ”PersonalAgents”.
Digital Transformation (DX) is accelerating globally, and payment platforms are evolving into a
Payment Orchestration Platform with global payment functions. Japan, an economy that is behind inadopting cashless payments, is part of the transition. Integration of marketing and payments will
begin with web3, and a "new customer experience - a new engagement model" will start basedon blockchain and Metaverse.
We are entering an era that social architecture will also need to change (require new contexts). Not
only business but all areas of society will face an unprecedented social transformation globally.
No one can predict the speed of this change.

During the next 5 years, DG will attempt to develop a new “IT business ecosystem”, by following
its purpose, “Designing ‘New Context’ for a sustainable society with technology”.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved3

History of DG Group's Contextual Design and Social Implementation
Since its establishment in 1995, DG has been developing the latest internet business deploying cutting-edge
technologies based on marketing and payment. Our next generation focus will be on Gen AI / web3, etc.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved4

Overview of Payment Platforms and Next Generation Businesses
Ⅰ Continue “DG FinTech Shift” strategy centered on our payment platform. Increase recurring revenue stream.
Ⅱ Social implementation of Next-generation technologies / Develop non-linear businesses through Blockchain,
Gen AI, etc.
web3/CryptoRelated BusinessⅡNon-LinearBusiness DevelopmentBlockchain / Gen AI

Combine payments and businesses generated
non-linearly with cutting-edge technologies

MarketingDX Business

FintechBusiness

Payment Platform
Investment/Incubation
Payment Platform

StrategicJV

Ⅰ Ongoing Developmentof Payment Platforms

Expanding the portfolio of strategic businesses
around the Fintech area, which creates acompetitive edge and contributes to the growthof the payment business

Copyright © 2023 Digital Garage, Inc. All Rights Reserved5

DG Group’s Assets

The Group's three largest assets in Japan＜ Resilient and scalable strategic design to respond to a period of rapid technological change ＞
Asset Ⅰ

Asset Ⅱ

Asset Ⅲ

Internet
Media Assets

Payment Platform“Kakaku.com”/”Tabelog” User

Transaction Volume

140
68

Affiliate Marketing

M User（mth.）

Contracted Restaurant on “Tabelog”

K Restaurant

Content Media Consortium

30 150
Co.

Media

5.3
950

Startups Invested inT JPY

Payment Locations

26

B JPY

Total AD
Volume38400
70

Co. Over

Early Stage Investment Balance

K Location

Affiliate AD
VolumeGlobal Investment
Startups Incubation

B JPY

B JPY

Onlab Selected Startup

145

Co.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

6DG FinTech Shift Phase Ⅱ / Concepts and Keywords of the New Medium-term Plan
Achieve further growth by combining the Group's three largest assets in Japan<Largest Media Business>

Asset ⅠInternet
Media Assets

DomesticInternet Business<Largest PSP/Affiliate Business>

Asset Ⅱ

Payment Platform
Affiliate Marketing<Largest Overseas Investment Business>

Asset Ⅲ

Global Investment
Startups Incubation

GlobalInternet BusinessGroup Synergy × Platform Upgrade × Global Alliance
Achievement of the Medium-term Plan andsocial implementation of “NEW CONTEXT”
Copyright © 2023 Digital Garage, Inc. All Rights Reserved7Quantitative Targets in the Five-Year Plan（KPI）

Growth Rate ofPre-tax Income※5Y CAGR

20153010※ Excluding investment business and equity method income from Kakaku.com

Payment Transaction
FY28.3 Target
VolumeInvestmentBusiness Income

5Y Total

ShareholderReturns ※5Y Dividend% OverT JPY OverB JPY OverB JPY Over※ In addition to the stable dividend described as above, will consider additional returns strategically based on business progress

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

8Specific Initiatives

Group Asset ①： Initiatives with the Kakaku.com Group＜Next-generation Technology / Gen AI・web3・Fintech＞
Develop Smart Commerce in the age of Gen AI and web3, through joint development of Fintech businessand fusion of next-generation technologies, centering “Tabelog” and “Kakaku.com” as a core

“Kakaku.com” / “Tabelog” User :140 M User (mth.)

×Transaction Volume：5.3 T JPY
Payment Locations：950 K OverR&D with DG Lab・DA Lab＜DG / Kakaku.com Group Deepening Strategic Alliances ＞
Partnership / Collaboration / JV with Japan‘s largest vertical media
1) Digital Garage and Kakaku.com Decide to Jointly Develop Fintech Services for the Food
Service Industry 3/30/23 Press Release➡ Start invoice card payment following ”Tabelog Order”. Continuous development of fintech business for restaurants2) Agreed to Establish a Joint Venture Company for Next-generation Business Centered on“Kakaku.com” 5/10/23 Press Release➡ To launch JV for ”Smart E-Commerce business" with next-generation technology/password-less authentication and one-click payment➡ In addition to travel / finance sectors, which DG is already active in payment services, add D2C and games / entertainment sectors tothe next main focus

3) Development and Implementation of “Tabelog” Plugin by ChatGPT 5/8/23 Press Release➡ Deploy new technology for the first time in Japan tothe “Tabelog” service utilizing DG’s extensive knowledge and network
Copyright © 2023 Digital Garage, Inc. All Rights Reserved10

Group Asset ①： Businesses with Kakaku.com GroupFocus on food, travel, and E-Commerce industries where DG Group can leverage its strengths.
Aim to achieve ~10% of the 15 T JPY target for payment transaction volume in 5 years.
Current and New Initiatives

ⅠⅡ

Current Initiatives

New Initiatives ①（Current Media Traffic x PaymentPlatform）

Business DomainDetails

Payments

Travel business as core, currently considering “Tabelog” and otherMarketing

No. 1 agent for affiliate marketing services

Incubation

Partnering with Open Network Lab (145 startups selected in 14 years)

R&D

R&D of new technologies in DG Lab and DA Lab （B2C
Tabelog
B2B

ChatGPT and web3）“Tabelog Order”（Payments at restaurants）“Tabelog Yoyaku”（Pre-payment）（Multilingual inbound payment using ChatGPT）
Invoice card payment service“Tabelog Shiire” (ordering system for restaurants)

Smart E-Commerce(Frictionless Commerce) Business Using New Technologies
新テクノロジーを駆使したスマートEC（フリクションレスコマース）事業

Ⅲ

New Initiatives ②（Areas Utilizing New Technology）

Establishmentof JV

Expansion to E-Commerce businesses,with stores on “Kakaku.com” as the first users
Expansion and development to BI.Garage（Media Consortium） is in view
Initiated Projects
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

11Group Asset ②：Platform UpgradeUpgrade platform and expand the trade area of payment transaction volume utilizing
the group’s assets of ①media assets（largest in Japan) and ③global investments
Accelerate Growth through Further Updates of Payment Systems

SettlementTransaction VolumeAnnual
growth ofapprox. 20%

Achieve higher
growth・Stability and redundancy of the payment platform utilizing Oracle’s
database with real-time bi-directional replication utilizing Oracle’s・Strengthen and expand offshore (India) / near-shore engineeringresources
・Real-time display and visualization of merchant business data
・Completed system integration of two DG group payment companies.
Started integration of payment platform with Toshiba TEC. DG willcontinue to function as a key player in the reorganization of theindustry

Current ～ 5Y

Further Acceleration of B2B Domain and Promotion throughGlobal Expansion and Alliances・Strengthen development of B2B market where cashless
payment is rapidly increasing
・Deepening alliances with global payment companies /Strengthen Global Payment Orchestration(Develop multi-currency, multi-payment, and cross-border E-Commerce markets)

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

12Group Asset ③：Global Incubation Stream＜ Strengthen and Expand Global Incubation Stream ＞
Keep evolving the unique deal sources developed since DG’s founding in North America and Japan, Asia, and Europe

・Capture next-generation startups from leading VC networks (SV Angel, etc.), an inner circle inSilicon Valley, and "Open Network Lab" to incorporate them into the recurring business・Followed by DG Lab, DA Lab, led by Chief Architect Joi Ito, will function as a strategic R&D arm
engaging with next generation technologies such as AI and web3.
・Networking with key members of the global internet community at NCC, hosted by the founders<Origination>, <Incubation>, and <Implementation> of new technologies on a global scale

Establish European Base in addition to Silicon Valley

Tokyo Network. Launch Startup Studio

Copyright © 2023 Digital Garage, Inc. All Rights Reserved13Financial Strategy for Investment Business•••

Sell shares in which the Company has direct investments and earn investment EXIT income (proceeds from sales, etc.)
Invest in new opportunities selectively. For investments aiming for financial returns, invest from managed funds. Investmentson the balance sheet is planned to decrease.
Clarify use of funds for investment EXIT income. Decide strategically on investment in business growth opportunities andadditional shareholder returns.

5Y Picture of Direct Investment and Income from Sales

Usage of Investment EXIT Cash Flow

70 B JPY
Investment in Growth✓ （NewBusiness Development）
Make strategic decisions based on
business environment and opportunities

OperationalInvestment
onBalance
Sheet

UnrealizedProfit

Investment
BusinessCF(Operating costs,after tax)

Book value

Investment
Business Income
More than 30 B Yen（5Y Total）

End of FY23.3✓

Consider Additional
Shareholder Return

Reinvestment in Startups
and Managed Fund✓

Up to 30% of Investment
Business Income

Investments✓ Strategic（M&A・Capital alliance）

End of FY28.3
Copyright © 2023 Digital Garage, Inc. All Rights Reserved14

Cash Allocation••

Separate allocation resources into CF from Base Business CF*1, which is generated on a recurring basis, and CF fromInvestment Business CF*2, which is highly volatile.
Stable shareholder returns through Base Business CF. Decision of usage of Investment Business CF will be decided strategically.

Cash Allocation
Investment in
Existing Business GrowthBase Business
Cash Flow

Investment in
New Business Growth
Improvement of
Financial Structure
Shareholder Returns
Investment in Growth/
Additional Shareholder Returns

Investment Business
Cash Flow

Investment in startups
Strategic Investments（M&A・ Capital alliance, etc. ）Maintain and expand
revenue baseDevelop next-generation
businesses that create corporate
value

5Y dividend totalingat least 10 B JPY
Dividend payout ratio of at least 20%of Base Business CF

Decide strategically based onbusiness environment andinvestment opportunities
Up to 30% of InvestmentBusiness Income※1 Basic Business CF： Pre-tax income from operations that generate recurring profit＋Depreciation Cost+Dividends from affiliates－Headquarters cost－Transient Profit＋Transient Loss
※2 Investment Business CF： Investment income (proceeds from sales, fund distributions, etc.) － Investment business operating costs (SG&A, income taxes, etc.)
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

15

Sustainability
Aim to develop a sustainable society on a large scale, by supporting
ESG management of portfolio companies and investing in ESGstartups.

Support sustainable growth of portfolio startups
Launched in 2010, Onlab, Japan's first seed accelerator program, has
supported over 140 startups to date. DG is running programs tostrengthen ESG management, which is now a global standard. for its
portfolio companies that will be active globally in the future. DG
continues to contribute to building a sustainable society on a large scale.

Investment in ESG-related startups
Invest in startups through Open Network Lab & ESG I “Earthshot Fund” with themes
related to major social, technological, and environmental changes occurring on a globalscale.
< Selected Related Investments >Copyright © 2023 Digital Garage, Inc. All Rights Reserved

16

Sustainability

Establishment of Sustainability Committee

New committees and specialized departments to be established to further
promote sustainability management
DG Group's Main Priorities

Effective Utilization of human capital
Improvement of working environment

Information cecurity
Privacy protection

Building an ecosystem with startupsCurrent Corporate Governance Structure
Audit and Supervisory Committee

Transitioned to a company with an audit committee system in September 2016 to strengthen the audit andsupervisory functions of the Board of Directors.

Nomination and Compensation Advisory Committee

A voluntary advisory committee composed of a majority of independent outside directors

Ratio of independent outside directors
The ratio of independent outside directors on the Board of Directors has increased to 46% to reflect the opinions ofminority shareholders (38% at the General Meeting of Shareholders in June 2021.)

Diversity

Ensure diversity of the Board of Directors by having members with diverse backgrounds. In addition to members withexperiences that contribute to the Company’s business and top management experience at corporations, knowledge ofadvanced technologies, accounting and legal expertise, and international business experience.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

17Change in Business Segments

Business Environment and Challenges••

In a competitive business environment with課題と環境認識
technology evolving rapidly, growth is not possible with eachbusiness areas operating separately
Integration of our diverse business assets is essential for growth
FinancialTechnologyⅠ(Payment Business)

MarketingTechnology

PlatformSolution••

Integration of payment business and marketingbusiness
リカーリング事業
Strengthen cross-selling among clients andreinforce recurring revenue model(Marketing Business)

Long-term
Incubation

Ⅱ(Long-term Strategic Business)

Headquarters Costs
New Business
Incubation
Technology（Investment Business）

Ⅲ

Long-term
Incubation

Global Investment
Incubation••••

Businesses with Kakaku.com Group and other new
strategic businesseses
Develop commerce and Fintech product services
that contribute to multi-layering and recurring
revenue, mainly in Japan

Global startup investments
Explore new technologies and services throughalliances with startups

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

18Platform Solutions Segment Incomes Forecast for the FY24.3

Platform Solutions Segment, aims to generate competitive advantages andrecurring type revenues by integrating data/marketing and DX services, inaddition to its solid growth in the payment business. Aim over 15% YoY
increase in income before tax.

Segment Income Before Tax Forecast（ Unit：Billion JPY ）PlatformSolution

FY23.3

FY24.3

Increase(Amount)

Increase(Ratio)64 74 +10 +15% Over

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

19Generated by Midjourney