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FavourUp

Platform:
Crowdcube
Stage:
Seed
Industry:
Business Services
Location:
UK - London
Date Rated:
26/01/18
Raise:
£90,000
Equity:
13.04%
Valuation (Pre Money):
£600,184
Industry: Business Services
Location: UK - London
Platform: Crowdcube
£90,000 Seed
Valuation: £690,184
Date Rated: 22/01/18

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS

Business Summary

FavourUp offers brands and marketing agencies a platform allowing them to capture and integrate fan and influencer-generated social media content into their own marketing channels. The system is currently being used by 6 brands, with these funds being used to fuel expansion.

Financial Overview

Date (y/e) Year 1 Year 2 Year 3
Sales Year 1£35,613 Year 2£258,640 Year 3£612,482
Gross Profit Year 1£35,613 Year 2£258,640 Year 3£612,482
GP as % sales Year 1100% Year 2100% Year 3100%
Overheads Year 1£98,500 Year 2£260,000 Year 3£285,000
Operating Profit Year 1-£62,887 Year 2-£1,360 Year 3£327,482
OP as % sales Year 1-177% Year 2-1% Year 353%
Closing Cash Year 1- Year 2- Year 3-

Note: This financial information has been sourced from the company on 22/01/2018 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
51%
SKILLS:
EXPERIENCE:
COMMITMENT:
FavourUp's management team is small and would benefit from at least 1 additional member to free up the CEO/CTO to focus on one aspect of his duties.
This is the Founder's first startup, but they have prior experience in influencer marketing and at fashion brands.
The Founders have already dedicated significant time in bringing FavourUp to market along with some of their own funds, and only plan for very modest remuneration post-funding.
59%
MARKET:
PRODUCT:
COMPETITION:
Influencer marketing is undergoing a period of rapid growth and FavourUp's service can simplify managing a large fan-base.
FavourUp's early clients provide glowing endorsements and the platform is ready for a full-scale release. Selling to agencies as well as direct to clients will help to diversify revenue sources.
There are a number of very well established competitors offering similar aggregation services.
29%
PROFITABILITY:
CASHFLOW:
RETURNS:
FavourUp's financial projections reveal very optimistic marketing targets - even more so given the Y1 budget would only just cover salaries, leaving very little in the spend budget.
There is insufficient information available to fairly rate this aspect of the business
Investors hoping to see significant returns would likely need to wait until long past the third year, which is as far as the projections go. With a future round planned be ready to follow-on.


Conclusion

FavourUp's team have developed, launched and sold a platform that gets good reviews and is ready to take advantage of the rapidly growing influencer marketing sector.

The forecasts suggest, though, that the company is not prepared to make the most of the growth opportunity. The initial budget for Sales and Marketing will barely cover the cost of the planned hire to manage this, leaving practically no budget for any marketing campaigns. Sales to agencies (which may be expected to come from Sales activity, rather than Marketing) are expected to make up the majority of revenues, but the per-agency licensing costs are between 2.65 and 3.04 times more expensive than the equivalent number of direct-to-brand accounts - a heavy premium to pay for a white label when a client could buy an account at £49/month and simply share their account details with their agency.

The issue of rights management will also be crucial, ensuring that user-generated content is properly attributed, that reproduction permissions are obtained and that the brands use of any media is in-line with the contractual terms agreed with any influencers (and social media channels!).

Related Links

Crowdcube Pitch

www.favourup.com

 

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