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Ondo New Pilot With 100k Customer PURE Insurance, Advancing US Expansion a Significant Milestone

New US Deal Signals Ondo's American Expansion Strategy. Ondo announced a new deal with PURE Insurance, it's 16th partner globally and 2nd major deal in America, a key focus market for the company going forward in our view.

Midsize Customer Base, But High Quality and High Growth. PURE serves a customer base of over 100,000 high net worth members, based in New York state with clients across several states. PURE reports a 15% compound growth rate since its inception in 2006. This deal is a pilot agreement in one state so it is too early to ascribe significant value to the partnership. However, if we assume the company can eventually achieve a 20-40% penetration rate at this customer, similar to its recent progress with European based partners, and an estimated unit pre-tax net present value at 8% of £124 this suggest a value for this pilot of between £2.5-5.0M to Ondo. But as the company is aiming to shift towards the new 'auto-ship' model in America with higher penetration rates up to 80%, this could suggest a pre-tax NPV of up to £10M. Further details about our NPV calculation for a single unit can be found in the exhibit below and in our Initiation of coverage note HERE

A Sign of Things to Come in America. We continue to view US Expansion as a major component of Ondo's near-term strategy. The company's existing partnerships in the US include Mutual of Enumclaw, a mid-sized insurer based in Washington state, but as yet not any of the top 10 US Insurers who are each orders of magnitude larger than Ondo's existing US partners. If the company is able to partner with these insurers or any of similar size, we think there's potential for a major change in the scale of its unit sales and revenues.

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