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Hubbado

Platform:
Crowdcube
Stage:
Expansion
Industry:
Business Services
Location:
UK - London
Date Rated:
31/01/18
Raise:
£500,000
Equity:
9.09%
Valuation (Pre Money):
£5,000,550
Industry: Business Services
Location: UK - London
Platform: Crowdcube
£500,000 Expansion
Valuation: £5,500,550
Date Rated: 29/01/18

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

Hubbado is a site helping companies to hire vetted consultants, initially focused on IT but ready to expand into other sectors. Their fee structure is a simple 10% charge paid by the client company, with some further revenue coming from financing early payment of contractors. The platform has been live since 2015 and generated sales of £3.5m in YE Feb-17. These funds will be used to add additional services to the offering and to expand the business to new territories.

Financial Overview

Feb-21
Date (y/e) Feb-17 Feb-18 Feb-19 Feb-20 Feb-21
Sales Feb-17£3,514,742 Feb-18£4,973,047 Feb-19£13,220,120 Feb-20£22,444,413 Feb-21£36,181,491
Gross Profit Feb-17£338,467 Feb-18£478,905 Feb-19£1,376,214 Feb-20£2,397,063 Feb-21£4,330,925
GP as % sales Feb-1710% Feb-1810% Feb-1910% Feb-2011% Feb-2112%
Overheads Feb-17£353,365 Feb-18£340,421 Feb-19£644,981 Feb-20£1,086,554 Feb-21£1,392,260
Operating Profit Feb-17-£15,256 Feb-18£130,792 Feb-19£715,208 Feb-20£1,274,842 Feb-21£2,883,665
OP as % sales Feb-170% Feb-183% Feb-195% Feb-206% Feb-218%
Closing Cash Feb-17£8,289 Feb-18£612,923 Feb-19£1,185,089 Feb-20£2,204,962 £4,511,894

Note: This financial information has been sourced from the company on 23/01/2018 or from public sources. The Sales figure here represents Gross Transaction Value and so Gross Profits are analogous to Net Revenue. Financial data is NOT verified by Wheatfromchaff Ltd.
70%
SKILLS:
EXPERIENCE:
COMMITMENT:
Hubbado's management team lacks an experienced marketer, but despite this the current team has built Hubbado to significant scale. For a round of this size an FD would be useful.
The team are experienced consultants, with previous senior level experience in managing a large consulting firm as well.
The team have been working full-time on Hubbado for some years now and should be fully committed to its success.
77%
MARKET:
PRODUCT:
COMPETITION:
The IT consultancy and freelancing market is large, and there are many other industries that Hubbado could expand into.
Hubbado started generating material revenue shortly after launch and has received endorsements from satisfied clients.
Hubbado faces a number of competitors, primarily large job boards as these mostly support consulting work too. Competitive pricing and service however give Hubbado an advantage.
66%
PROFITABILITY:
CASHFLOW:
RETURNS:
Hubbado's summary projections show reasonable revenue growth and overheads that scale appropriately. The company is slightly behind this FY's expectations.
Thanks to modest overheads and a 'payment first' business model Hubbado's growth should be fairly secure. There is abundant headroom even at the minimum funding round size of £500k.
Hubbado's valuation is appropriate, giving investors a reasonable chance of seeing good returns. All investors will have equal rights and no further rounds are anticipated.


Conclusion

Hubbado's team have built a successful platform that should easily scale to new industries and territories, giving a significant growth opportunity. Costs have been kept in check and, while the company has been operating at a loss the margin is very slim. The current year's present operating loss suggests that this years target may be missed, so given the time scales involved in a crowdfunding campaign investors may like to obtain a more up-to-date statement.

Since the purpose of this round is to expand the business the team will benefit significantly from the addition of an experienced Head of Marketing as this is the one key operational function they are currently lacking. Scaling typically means increasing costs of acquisition and while Hubbado mention their ARPU they don't provide any details on their marketing budget.

Related Links

Crowdcube Pitch

www.hubbado.com

 

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