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Verv

Platform:
Crowdcube
Stage:
Expansion
Industry:
Environmental & Ethical
Location:
UK - South West
Date Rated:
26/09/17
Raise:
£500,000
Equity:
1.96%
Valuation (Pre Money):
£25,010,204
Industry: Environmental & Ethical
Location: UK - South West
Platform: Crowdcube
£500,000 Expansion
Valuation: £25,510,204
Date Rated: 25/09/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

Verv is a home energy monitor using artificial intelligence to provide advanced insights into individual appliance usage and condition to lower user's energy bills and reduce their carbon footprint. Verv has one granted patent, another five filed and has pre-sold 1200 units to blue-chip companies. This round of investment will be used to improve the manufacturing process and to support growth.

Financial Overview

Mar-22
Date (y/e) Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
Sales Mar-18£1,523,250 Mar-19£5,021,750 Mar-20£26,709,750 Mar-21£64,986,000 Mar-22£127,144,175
Gross Profit Mar-18- Mar-19- Mar-20- Mar-21- Mar-22-
GP as % sales Mar-18- Mar-19- Mar-20- Mar-21- Mar-22-
Overheads Mar-18- Mar-19- Mar-20- Mar-21- Mar-22-
Operating Profit Mar-18-£2,600,745 Mar-19-£1,922,410 Mar-20£10,300,972 Mar-21£31,430,850 Mar-22£79,194,554
OP as % sales Mar-18-171% Mar-19-38% Mar-2039% Mar-2148% Mar-2262%
Closing Cash Mar-18-£2,777,842 Mar-19-£1,817,548 Mar-20£9,221,950 Mar-21£29,380,150 £75,404,987

Note: This financial information has been sourced from the company on 25/09/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
91%
SKILLS:
EXPERIENCE:
COMMITMENT:
There is a strong team in place covering all the roles required, especially in product and business development, which should take the company to the next level.
The management team has a clear understanding of the energy sector. They have extensive commercial experience in the industry and an experienced board of advisors.
There is a team of 27, most of them full-time and the Founder has invested over seven years into the business, but he is also investing £100k in this funding round.
76%
MARKET:
PRODUCT:
COMPETITION:
There is a vast market of 27m homes in the UK alone, and Verv intends to address 15% of them initially. The company is also starting tests in international markets like Italy and France.
The product is fully developed and has shown initial commercial traction with over a thousand pre-sold units. It is also in commercial trials with several major energy retailers.
The company already has a patent approved and five more filed. The product does not need a professional installation, giving the business a strong advantage over others that do.
50%
PROFITABILITY:
CASHFLOW:
RETURNS:
Given the high-level forecast it is difficult to evaluate profitability, however given the level of overheads, the business will need to scale dramatically to enjoy healthy net profit margins.
The team intends to raise £4m in this funding round and that could be sufficient to achieve break-even but only if mass adoption occurs, therefore there is still a great risk of a shortfall.
If the forecast is achieved, investors in this round should expect substantial returns within five years.


Conclusion

There is a strong management team in place developing a product that appears to be in the forefront of the energy efficiency sector with great support from an experienced board of advisors. Verv has also generated relevant commercial traction to date securing several strategic partnerships that should help to ramp up sales rapidly.

The sales projections seem aggressive but investors should note that the company has many revenue streams planned and given that this funding round aims to help to lower the manufacturing costs by up to 80% and the product does not need professionals to be installed, mass adoption is imaginable.

It is unfortunate that investors can only obtain shares held in a nominee account as if the company gains traction they may well decide to raise additional funds to accelerate further and some investors may miss out as the Crowdcube nominee operates on a first-come, first-served basis.

Related Links

Crowdcube Pitch

verv.energy

 

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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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