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Knomi

Platform:
Crowdcube
Stage:
Seed
Industry:
Internet
Location:
UK - South West
Date Rated:
24/07/17
Raise:
£300,000
Equity:
16.67%
Valuation (Pre Money):
£1,499,640
Industry: Internet
Location: UK - South West
Platform: Crowdcube
£300,000 Seed
Valuation: £1,799,640
Date Rated: 21/07/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS & EIS

Business Summary

Knomi is a shopping App helping high spending tourists find London’s luxury designer and independent boutiques. Knomi's App is already functioning and has over 70 luxury brands on board. This round of investment will be used to increase the number of partner stores in London and to optimise the App content.

Financial Overview

Date (y/e) Jun-18 Jun-19 Jun-20 Jun-21
Sales Jun-18£64,907 Jun-19£1,065,187 Jun-20£4,249,962 Jun-21£8,597,207
Gross Profit Jun-18£64,907 Jun-19£1,065,187 Jun-20£4,249,962 Jun-21£8,597,207
GP as % sales Jun-18100% Jun-19100% Jun-20100% Jun-21100%
Overheads Jun-18£350,785 Jun-19£962,696 Jun-20£1,712,600 Jun-21£2,665,804
Operating Profit Jun-18-£285,878 Jun-19£102,491 Jun-20£2,537,362 Jun-21£5,931,403
OP as % sales Jun-18-440% Jun-1910% Jun-2060% Jun-2169%
Closing Cash Jun-18£14,122 Jun-19£116,613 Jun-20£2,653,975 Jun-21£8,585,378

Note: This financial information has been sourced from the company on 21/07/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
62%
SKILLS:
EXPERIENCE:
COMMITMENT:
Although the CEO has limited management skills, he has financial expertise and will be supported by a complete team covering all the skills required to develop the business.
The Lead Developer has a strong background building ios Apps and the team has relevant knowledge of the fashion industry but limited commercial experience.
The Founders have invested over four years into the company but their increased salaries will now lower the cost of failure for them.
61%
MARKET:
PRODUCT:
COMPETITION:
In London alone the luxury personal goods market is worth about £10bn but Knomi intends to address other cities like New York and Milano in the near-term.
Knomi already has over 10k users and over 70 retailers but more coverage is needed to be attractive to its users and the team is still developing other features such as rewards.
The company intends to compete with innovative features like receiving notifications when the user is close to a boutique stocking any of its desired items, but this could easily be replicated.
58%
PROFITABILITY:
CASHFLOW:
RETURNS:
The business model seems highly scalable and the company could enjoy healthy profit margins but the team will need to control overheads carefully if does not achieve its sales projections.
This round of investment provides limited headroom to protect against any revenue shortfall but further funding is planned next year to finance the planned expansion.
If the team can deliver their baseline forecast and achieve an exit investors could expect rewarding returns. But further investment will be also needed to avoid dilution.


Conclusion

The company is developing a great tool that could both assist tourist shoppers and gain valuable insights about shopping and fashion trends as well as user behaviour. However, the loyalty program could be an important feature as without it a large part of the addressable market "visitors in London" may not be attracted or interested, so delays in its implementation or adoption overall could easily lead to the less attractive downside projections.

Investors should note that further funds are expected to be raised in 2018 to accelerate growth and a minimum investment of £5k is required to secure pre-emption rights.

Related Links

Crowdcube Pitch

www.knomi.com

 

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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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