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Loose Ends App

Platform:
Crowdcube
Stage:
Seed
Industry:
Leisure & Tourism
Location:
UK - London
Date Rated:
17/11/17
Raise:
£100,000
Equity:
10%
Valuation (Pre Money):
£900,000
Industry: Leisure & Tourism
Location: UK - London
Platform: Crowdcube
£100,000 Seed
Valuation: £1,000,000
Date Rated: 09/11/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

Loose Ends is an app simplifying the process of organising social events with friends and offering destination suggestions, with the company taking a cut of bookings or sales made through the app. The app is complete and has been available since 2016. These funds will be used mostly for marketing.

Financial Overview

Apr-22
Date (y/e) Apr-18 Apr-19 Apr-20 Apr-21 Apr-22
Sales Apr-18£3,692 Apr-19£144,565 Apr-20£943,882 Apr-21£3,446,618 Apr-22£9,139,020
Gross Profit Apr-18£2,975 Apr-19£128,794 Apr-20£850,274 Apr-21£3,135,879 Apr-22£8,389,971
GP as % sales Apr-1881% Apr-1989% Apr-2090% Apr-2191% Apr-2292%
Overheads Apr-18£64,500 Apr-19£255,333 Apr-20£831,667 Apr-21£1,606,500 Apr-22£1,796,583
Operating Profit Apr-18-£61,525 Apr-19-£126,539 Apr-20£18,607 Apr-21£1,529,379 Apr-22£6,593,388
OP as % sales Apr-18-1666% Apr-19-88% Apr-202% Apr-2144% Apr-2272%
Closing Cash Apr-18£28,508 Apr-19£142,189 Apr-20£102,726 Apr-21£1,523,883 -

Note: This financial information has been sourced from the company on 06/11/2017 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
57%
SKILLS:
EXPERIENCE:
COMMITMENT:
Loose Ends development and marketing have been outsourced, and Wubbleyou Ltd receives good endorsements for its development work.
With only one core team member there is limited experience in-house, but the CEO is supported by skilled outsourced professionals.
Mr Lewis has spent quite a lot of time working on Loose Ends over the past few years and his proposed remuneration is very modest for the coming year.
40%
MARKET:
PRODUCT:
COMPETITION:
The leisure market is large and social media is an omnipresent medium used by many to organise their social events.
The Loose Ends app has been available since Jan-16 but has gained very little traction since then. Development is ongoing with continuous improvements.
Facebook themselves have a similar solution in Events (relaunched on 10/11/17 as Facebook Local in the US), and there has recently been a competitor fund raising on Crowdcube.
32%
PROFITABILITY:
CASHFLOW:
RETURNS:
With rapidly decreasing CAC, growth plans would appear to be reliant on the app going viral. The sales commission structure is unclear and without any current clients it is as yet unproven.
The business model should support delivery without significant spending either prior to launch or on a unit basis. There isn't much headroom, suggesting a high chance of unplanned fundraising.
Without evidence that the intended sales commission is achievable, and a marketing plan reliant on unproven virality, there is a large amount of risk in what is an otherwise reasonable valuation.


Conclusion

Loose Ends is a ready-to-go app that will be operating in a large sector with a significant market opportunity. Unfortunately it lacks any killer feature that would radically differentiate it from services such as the omni-present Facebook Events.

Despite having been available since Jan-16 Loose Ends has achieved very little demonstrable traction and the pitch is tellingly short on KPIs. Couple this with a marketing plan that appears to rely on the app going viral, and investors may wonder if the projected £9.1m revenue can truly be achieved (especially as that is commission on GMV at an unspecified rate). The company has identified user acquisition as the main use of funds for the next stage of the business.

Related Links

Crowdcube Pitch

www.looseendsapp.co.uk

 

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The Ratings we publish have been approved and issued at Financial Promotions in the United Kingdom by Wheatfromchaff in the United Kingdom who is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. Wheatfromchaff Limited registered office is Kilver Court, Kilver Street, Shepton Mallet, Somerset, BA4 5NF and telephone number +44 (0) 1749 347 577. Telephone calls may be recorded. VAT No: 214 0196 49

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