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Candy Mechanics

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Candy Mechanics are partnering with chocolate brands to bring 3D personalised chocolate gifts to market.

101%
 - 
Funded 1 Oct 2018
£400,007 target
£408,650 from 240 investors
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Business overview

Location London, United Kingdom
Social media
Website candymechanics.com
Sectors Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C
Company number 9749521
Incorporation date 26 Aug 2015
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Investment summary

Type Equity
Valuation (pre-money) £2.2M
Equity offered 15.37%
Tax relief

EIS

Idea

Introduction

Candy Mechanics are set to shake up the chocolate industry with their innovative 3D personalisation technology. Partnering with global brands, consumers worldwide can now design and gift their own chocolate creations. This adds retail theatre to partners in-store experiences and can bolster online offerings. Specifically this technology offers chocolate partners the opportunity to enter the fast growing personalised gifting marketplace both online and in-store.

Through designing our innovative manufacturing process that uses robotics and automation we developed two product groups, both of which can be designed and created in under five minutes. Our lead retail product has been a 3D chocolate lollipop of your face, transforming a 3D scan into carved chocolate in a few minutes.

Our growth product is a luxury chocolate gift card. In less than 5 minutes: pick a design, personalise it, then watch it being made or order online - ideal for occasions such as Valentines, Christmas or Birthdays. Our fast process means all products are individually customised, offering brands mass-customisation at scale.

When building our brand, we saw the high demand for personalisation. To scale up we have partnered with major chocolate brand Godiva to leverage their brand equity and customer base. We plan to partner with multiple other brands and in doing so we aim to become the leading supplier of personalisation to the chocolate industry.

Intended impact

The initial idea for Candy Mechanics came about when our dyslexic founder told his class at University he was “Lickable” instead of “Likeable”. The idea of creating your head as a 3D lollipop was born. Candy Mechanics have become passionate about product innovation in personalisation and pioneering tech to shake up the chocolate industry which has historically shown a lack of growth. We believe we have developed a route into the personalised gifting market through our manufacturing process.

The reason we believe this is because of the quality of the product, the theatre we create & the interest from the rest of the chocolate industry. Candy Mechanics has the vision and expertise to help established brands ‘square-the-circle’ in the online marketplace. Through our website and retail experiences, we believe that we have successfully proven the business case. This has captured the attention of certain established chocolate brands who have the scale and infrastructure for us to partner with and reach much larger audiences.

Substantial accomplishments to date

2015
- Launched 3D printing process in a Makerversity workshop in Selfridges.
- Developed process to carve products in 4 mins.

2016
- Website for consumers to order personalised chocolate.

2017
- Covent Garden pop-up, selling over 600 Lollipops in 3 days.
- Coverage in 100 articles & social posts with 5M views.
Including:

- Captured attention of biggest chocolate brands and initiated partnership dialogues.
- Started working with robotics and software firms ABB and Autodesk.
- Launched retail pop ups in Leeds and Cardiff capturing 75% of customers’ email addresses and subsequently converted 5% into online repeat orders.

2018
- Profiled on CNBC, Mashable and CBBC News round.

Alongside these achievements, we have built a fantastic team and a truly passionate and supportive group of investors, advisors and non-execs.

Monetisation strategy

We believe that we've proven the demand for our products at live events, through retail pop-ups, and online. To scale we are exploring a range of options with leading chocolate brands. This includes revenue share deals for personalising products in their retail outlets and fulfilling online marketing campaigns. We expect that these relationships will define our expansion as we use their footprint to bring personalised chocolate products to a worldwide market.

We expect that our in house marketing and design team will work with partner teams on their channel marketing and user experience to maximise the offering we have developed.

Use of proceeds

Candy Mechanics are raising funds to fuel expansion through partnering with major chocolate brands.

Market

Target market

Our business is the personalisation and gifting of chocolate. Consumers purchase chocolate all year round but especially so on seasonal gifting occasions like Christmas - both online and in retail.

With adaptive technology, we can create different designs and styles to suit our partner brands from high end luxury brands to mass-market.

Alongside working with partners on their B2C offering, Candy Mechanics also have a live event and corporate gifting service both independently and in partnership with major chocolate brands.

This is particularly exciting because through the addition of the experiential and personalisation elements, Candy Mechanics sets itself apart from the rest of the market.

Characteristics of target market

The chocolate market is worth over $98bn globally and $6bn in the UK, but overall growth is weak; we feel chocolate brands need new growth markets. Meanwhile, the personalised gifting market is forecast to grow 9.1% yearly, already exceeding $1.5bn pa in the UK alone. Given this backdrop, we believe personalised chocolate gifting will continue to grow both in the UK and globally.

We aim to become the industry leader in personalised chocolate gifting. We believe we have the expertise, technology, retail theatre, ability to capture customers and team to do this. As a result, major chocolate brands are keen to partner with us, leveraging our expertise to add huge value to their massive customer base. We are exploring a range of options, enabling them to:

- Meaningfully access the personalisation and gifting markets.
- Improve brand image to be considered more innovative and accessible.
- Develop sales by engaging online customers and attracting a young demographic.
- Create a direct relationship with their customers.

Marketing strategy

The theatre of Candy Mechanics’ retail offering is coupled with social media and online marketing campaigns to unlock the online personalised gifting market, generally through our partners’ infrastructure. Furthermore, we anticipate additional opportunities being available via high traffic 3rd party websites.

We expect that our in-house marketing and design team will work with brand partner teams on their channel marketing and user experience to maximise the offering we have developed.

Competition strategy

Leading chocolate brands haven't translated well online, their products are mostly bought in store and often on an impulse. These products are not competitive with services which offer personalised gifts delivered world-wide at the click of a button.

To our knowledge, the personalised online gifting market is currently built on 2D printing technologies. Candy Mechanics’ differentiator is the innovative 3D carving technology, which we believe is highly scalable, and expertise which offers exciting personalisation. These features deliver on the expectations of tech-savvy millennials who want to be able to gift amazing products from their mobile phone.

The theatre and personalisation at our pop-ups and other retail experiences is leveraged through social media and online marketing campaigns around gifting seasons, and will be enhanced through partnerships with world-leading chocolate brands.

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If you successfully purchase a share lot of this business, you will be granted access.

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This campaign for Candy Mechanics has been approved by Seedrs Limited (trading as Republic Europe) ("Republic Europe", "us" or "we"), as of 5 July 2018 as a financial promotion. Republic Europe is authorised and regulated by the Financial Conduct Authority with firm reference number 550317. In approving this campaign, Republic Europe has concluded that the information, taken as a whole, is "fair, clear and not misleading." This means that for factual statements we have reviewed evidence of their accuracy, and that for aspirational statements we believe they are phrased appropriately in light of their speculative nature. You should note that in the case of factual statements, the evidence we review is provided by the business, and we do not audit it, which means that we may not be able to identify forged or altered evidence. You should further note that in the case of aspirational statements, the nature of the type of businesses presented on the Republic Europe platform is such that they are likely to have high ambitions, and we may approve statements that convey those ambitions even where we do not believe, or we do not have a view on whether it is likely, that they will be fully realised. The pre-money valuation and investment sought in the campaign are those set by the business: they are not reviewed or established by us, and the valuation is not an independent view of what the business is worth. Given the nature and type of businesses presented on the Republic Europe platform, it is possible that the business has very little cash remaining prior to receiving this investment, and the investment sought may be necessary for the business's on-going existence.

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Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £2,239,790

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

The investee business is responsible for setting its own valuation, it has not been prescribed by Seedrs.

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Equity Offered

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