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passingboxes

Platform:
Crowdcube
Stage:
Seed
Industry:
Media & Creative Services
Location:
UK - London
Date Rated:
19/10/17
Raise:
£150,000
Equity:
5%
Valuation (Pre Money):
£2,850,000
Industry: Media & Creative Services
Location: UK - London
Platform: Crowdcube
£150,000 Seed
Valuation: £3,000,000
Date Rated: 16/10/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

passingboxes is a website that will allow people to store important documents and memories to share with loved ones after their death. Users will be charged a monthly subscription fee once fully built, and until then there is a growing community and collection of articles. These funds will be used to add core functionality to the site, with a £1.6m round next year to fund marketing and expansion.

Financial Overview

Dec-21
Date (y/e) Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
Sales Dec-17- Dec-18£66,000 Dec-19£1,320,000 Dec-20£5,603,000 Dec-21£12,900,000
Gross Profit Dec-17- Dec-18- Dec-19- Dec-20- Dec-21-
GP as % sales Dec-17- Dec-18- Dec-19- Dec-20- Dec-21-
Overheads Dec-17£189,000 Dec-18£1,078,000 Dec-19£2,364,000 Dec-20£3,659,000 Dec-21£4,667,000
Operating Profit Dec-17-£189,000 Dec-18-£1,012,000 Dec-19-£1,044,000 Dec-20£1,944,000 Dec-21£8,233,000
OP as % sales Dec-170% Dec-18-1533% Dec-19-79% Dec-2035% Dec-2164%
Closing Cash Dec-17- Dec-18- Dec-19- Dec-20- -

Note: This financial information has been sourced from the company on 16/10/2017 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
55%
SKILLS:
EXPERIENCE:
COMMITMENT:
The team covers all the key roles, but there appears to be an 11 year gap in one member's CV which means their skills may not be fully up to date.
The team is very experienced and the CTO has seen a previous company through from foundation to acquisition (albeit over a very short period of time).
Most of the team appear able to dedicate their full efforts to passingboxes and they have secured over £200k from friends and family which should focus their minds.
35%
MARKET:
PRODUCT:
COMPETITION:
The death industry is large but sensitive to fluctuations in the mortality rate. Recent years have been good for the industry as baby boomers age.
Currently the product is little more than a forum and collection of articles. Development of the data storage service is ongoing with launch expected in 2018.
There are a number of competitor services not addressed in the pitch, with little to differentiate passingboxes. An established company could rapidly develop a 'vault and messages' service.
29%
PROFITABILITY:
CASHFLOW:
RETURNS:
passingboxes have provided only summary financial projections which show some very ambitious growth targets without any specified marketing budget or demonstration of CAC.
There is insufficient information available to fairly rate this aspect of the business
If the growth targets can be met then investors may see decent returns, but those targets are ambitious. There is only one class of share, but the Directors have dis-applied pre-emption rights.


Conclusion

passingboxes management team is experienced but there are some potential skill gaps that the teams bio's and LinkedIn profiles don't address. The target market is large but subject to fluctuations and may be coming to the end of a 'good' period. Meanwhile passingboxes faces a lot of established competition for what is, ultimately, a technically unsophisticated product. Significant funding to date appears to have produced very little and the company will burn through £2.2m before achieving profitability.

This is intended to be a subscription service but it is unclear whether this is charged to the bereaved for as long as they want to access these cherished memories, or to the soon-to-be-deceased.

All investors share one single class of share so newcomers big and small are investing on an equal footing to earlier angels, but the pitch is unusually silent on shareholder rights, and indeed documents at Companies House indicate the founders may have dis-applied pre-emption rights altogether. New investors may therefore want to enquire as to whether earlier investors were given the chance to top up for this round, and what guarantees the Directors will make that they will be given the chance to avoid dilution in the future.

Related Links

Crowdcube Pitch

www.passingboxes.com

 

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