What changed in MARKETWISE, INC.'s 10-K — 2022 vs 2023

Item 1. Business. Unless the context otherwise requires, all references in this subsection to “MarketWise,” “we,” “us,” or “our” refer to the business of MarketWise, LLC and its subsidiaries prior to the Closing, and to the business of MarketWise Inc. and its subsidiaries after the Closing.

We have an engaged subscriber base of approximately 841 thousand Paid Subscribers and a large and growing audience of over 15.7 million Free Subscribers. Millions of Investors are Taking Control of Their Finances, and We Have the Content and Tools to be Their Guide The nature of retail investing is rapidly changing, and we are taking advantage of these trends.

Rise of the self-directed investor. Years ago, and even today, retail investors sought advice from traditional investment managers. But over the past two decades, retail investors have increasingly taken control of their own portfolios. There are several reasons for this trend. In the aftermath of the 2008 financial crisis, investor skepticism increased toward large financial institutions and advisors.

Meanwhile, the development of online trading and the proliferation of financial information on the Internet has made it easier for investors to take control of their finances and self-direct their investments. Online brokerage platforms have slashed the cost to manage a personal trading account, so investors can now make trades for free or at a fraction of the historical cost.

As a result, the U.S. self-directed investor population is approximately 88 million people in 2022. And this self-directed population is growing by nearly 15% each year, and is expected to increase to approximately 115 million investors by 2024. 1 These factors have combined to motivate individual investors to take control of their investment decision-making.

These self-directed investors tend to lag the market indices so they seek the expert information to educate 1 Source: Celent Wealth Management, Self-Directed Retail Investment Market Study , March 2021 7 and empower themselves to manage their own portfolios.

As more investors take the self-directed approach to managing their financial future, there is significant demand for investment ideas, education, and market intelligence. Demographic shifts are increasing demand for our products.

Approximately 17% of the U.S. population are individuals over the age of 65. 2 And that cohort is growing rapidly, with roughly 10,000 Americans reaching retirement age every day. 3 Many of these people have significant retirement accounts on which they rely.

In addition, 65% of Millennials—people born between 1980 and 1994—identify themselves as “self-directed” investors. 4 As the Millennials continue to age and grow their investment portfolios, we have a significant opportunity to serve that demographic and grow our business. Financial markets are becoming more complex.

The historical approach toward managing a personal portfolio with a mix of blue-chip stocks, corporate bonds, and cash has become antiquated. The rapid growth of investment opportunities—including products such as exchange-traded funds (“ETFs”), cryptocurrencies, options strategies, and distressed corporate debt—has given self-directed investors today many different and sophisticated ways to invest their money.

And those choices continue to specialize and multiply. As investment options in the global financial markets increase, it becomes harder and harder for investors to stay informed and keep up with the strategies available to them.

We and our teams of editors and analysts are constantly surveying the markets for new strategies to help subscribers stay current with the changing markets. Financial research content is fragmented and price points vary. The landscape of financial research providers is fragmented, with hundreds of publications, platforms, and tools for investment research directed at distinct segments of the investing community.

Financial research providers range from free, advertising-supported platforms or crowdsourced investment websites to low-cost, “mom and pop” newsletter subscription services, many of which do not produce content at scale. There are also extremely expensive, subscription-based software platforms with data and tools designed for highly sophisticated institutional investors.

At the same time, our offerings have premium content that is highly actionable. 2 Statista, U.S. - seniors as a percentage of the population 1950-2050 , https://www.statista.com/statistics/457822/share-of-old-age-population-in-the-total-us-population/ 3 Federal Reserve Bank of St. Louis, How Many People Will Be Retiring in the Years to Come?

We believe investing is a lifelong endeavor—one that requires constant learning, course corrections, openness to change, and emotional discipline. In keeping with this core belief, we strive to build long-term relationships with our subscribers. We believe in publishing content that is educational, informative, and easy to understand, and therefore helps our subscribers become better investors over time.

This reinforces our lifelong relationships with our subscribers as they can grow with our platform. This forms a “virtuous cycle” of learning and improving through our offerings.

As subscribers learn more about how to manage their investments, that makes them more comfortable with 9 investigating the more specialized content covered in our high-end services, which further encourages them to continue broadening their investing skill set. Our market leadership, scale, and access to a wide set of subscribers creates strong network effects.

As we grow, we have larger budgets, which allows us to reinvest back into our research platform by hiring more analysts, developing more software and tools, and launching new products, which, in turn, helps us attract more subscribers to our platform. We are committed and continue to invest in our subscriber experience.

Our relationship with our subscribers is our most precious asset, and we strive to put the customer first in everything that we do. This customer-centric focus drives us to constantly upgrade the quality, breadth, and depth of our research in our existing products without materially increasing the cost of the subscription.

This approach also greatly affects how our customer service groups treat our subscribers when issues arise.

We instill in our teams that if we cannot reasonably meet the subscriber’s expectations, then we should ask the customer how we failed them, seek a mutually agreeable solution, and, if one cannot be found, offer them a refund or other form of compensation and find a way to part as friends.

Our free subscription products serve as a significant source of new Paid Subscribers, with an average annual free-to-paid conversion rate of approximately 1% to 2% between 2020 and 2022. Launch new products and target new markets.

We have also made key investments across our platform to create a repeatable, low-cost, and scalable business model. We have invested in business functions from marketing to technology which allow us to scale rapidly. We plan to continue investing in cutting-edge AI and advanced analytics-driven marketing tools to further optimize our marketing channels.

Our success depends on our relationships with our subscribers, as well as our employees. Our employees play a key role in delivering valuable content to our subscribers, which in turn, creates long-term value for our shareholders. We truly believe we have the best employees in the market.

We have grown our workforce organically and acquisitively over recent years, up from 275 employees in 2017 to 732 in 2022. We consistently have interest from the applicant community as demonstrated by our high offer acceptance yield.

We are also proud that all four of our eligible subsidiaries are repeatedly recognized as top workplaces by the Baltimore Sun and Sun Sentinel. Intellectual Property We rely on a combination of trademark and copyright to protect our intellectual property. We have registered certain of our trademarks and service marks in the United States with the U.S.

The Transactions On July 21, 2021, we consummated the transactions contemplated by that Business Combination Agreement, dated as of March 1, 2021, by and among Ascendant Digital Acquisition Corp., (“ADAC”), MarketWise, LLC, and the MarketWise Members, (as amended, the “Transaction Agreement”), which provided for: (1) the domestication of ADAC as a Delaware corporation; (2) ADAC’s capital contribution to MarketWise, LLC in exchange for certain units and warrants in MarketWise, LLC; and (3) the issuance of shares of Class B common stock, par value $0.0001 per share, of MarketWise, Inc. to the MarketWise Members (the “Class B common stock” and, together with the Class A common stock, the “common stock”) (the transactions described above and all transactions contemplated by or pursuant to the Transaction Agreement collectively, the “Transactions”).

Upon the closing of the Transactions, ADAC changed its name to “MarketWise, Inc.” and became the sole manager of MarketWise, LLC. MarketWise, Inc.’s only direct assets consist of MarketWise Units and warrants of MarketWise, LLC, and substantially all of the assets and the business of MarketWise, Inc. are held by MarketWise, LLC and its subsidiaries.

Upon the consummation of the Transactions, ADAC’s Class A ordinary shares, warrants, and units ceased trading on The New York Stock Exchange, and MarketWise, Inc.’s Class A common stock and warrants began trading on the Nasdaq under the symbols “MKTW” and “MKTW W,” respectively.

See also Note 1, Organization — Reverse Recapitalization with Ascendant Digital Acquisition Corp. , to our audited consolidated financial statements included in this report. Available Information Our website address is MarketWise.com .