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Frost

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Frost is a next-generation digital account ​ helping to save time, money and the planet.

106%
 - 
Funded 28 Apr 2023
£1,725,000 target
£1,839,108 from 184 investors
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Business overview

Location Manchester, United Kingdom
Social media
Website frost.app
Sectors Finance & Payments Digital B2C
Company number 12231881
Incorporation date 27 Sep 2019
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Investment summary

Type Equity
Valuation (pre-money) £12.6M
Equity offered 12.72%
Tax relief

EIS

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Business highlights

  • 12,000+ users
  • Processed over £20m* of transactions for our users
  • Principal members of VISA
  • Key collaboration with IBM
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Key features

  • Secondary Market
  • Nominee investment min. £10.00 +
  • Direct investment min. £10,000.00 +

Idea

Introduction

Frost is a next-generation digital account designed to save time, money, and the planet. The business is FCA-authorised as an EMI with a user-friendly interface, as well as its own core banking and transaction monitoring system.

Through intelligent automation, we’ve built a Save Assist feature that seamlessly connects to utility providers, enabling users to save up to an estimated £1,000 per annum on essential household bills.

In addition to household savings, Frost has a green focus from the outset. Frost is a certified CarbonNeutral® company, with green initiatives at the forefront of their product development. Their roadmap includes a green savings account, auto-investing in green investments and educating consumers on the carbon footprint of companies that they are purchasing from.

Founded by a team of serial entrepreneurs, Frost is now looking for funding to grow their user base and launch several new products this year.

Substantial accomplishments to date

Frost has achieved significant progress since its inception, the key accomplishments to date are:

• August 2021 - Frost was approved by the UK FCA as a Small Electronic Money Institution

• February 2022 - Principle members of VISA

• June 2022 - Public launch

To date, Frost has experienced significant growth with 12,000+ users and over £20m* of transactions processed for our customers.

Frost has also bulked up its fraud prevention with integrations with CIFAS and advanced AML / transaction monitoring system, along with numerous product development including Google pay, automated card management, video onboarding and 3DS biometric authentication.

Monetisation strategy

Frost has diversified its revenue streams away from a traditional digital account revenue. Whilst we have diversified, we still receive these revenue streams but we treat our revenues in two distinct categories:

1. Traditional ancillary digital account revenue

• Card fees - interchange revenue, delivery fees, closure fees

• Foreign exchange

• Interest on customer balances, both on and off our clearing bank

• Premium account via a monthly subscription (on the roadmap for 2024)

2. Affiliate / switching revenue

• Using the save / assist functionality, the business takes commission for every switch that is successfully completed

Use of proceeds

The funds will predominantly be spent on further development of the product and an increased marketing budget to acquire further customers.

These enhancements include:

• Extending the save/assist tool to also include broadband, insurance, telephone and remortgaging.

• Enhancing the core platform to include ApplePay, standing orders and Confirmation of Payee.

• Broaden the product suite to offer interest and auto-save green products.

• Educate consumers on the carbon footprint of companies they're purchasing from.

The business will also invest heavily in marketing and user acquisition through the following channels:

• Referral programme - we’ll introduce a ‘refer a friend’ element with green-focused rewards, e.g. plant a tree.

• Organic growth through continuous development of our website, campaigns, innovation and UX improvements.

• Paid campaigns - increase our brand awareness, develop a partnership model and retarget those lost in the onboarding journey.

*Based on unaudited management accounts

Key Information

Team Structure

The Company’s Co-Founders and Directors, Edyta Sliwinska and Pawel Oltuszyk, work full-time on Frost Money Ltd. They also retain their roles as co-founders and directors at the following companies:
1. Optimal Strategies Limited (a business offering web design services)
2. Optimal Claim Limited (a business offering legal services)
3. Optimal Med Limited (a business offering medical-legal reporting)

While they retain ownership, they are not involved in the day-to-day running of these companies.

The Company Director and CSO, Andrew Jennings, works for Frost Money Ltd alongside his role as Managing Director and owner of Osun Holdings Ltd, and its subsidiaries. Osun Holdings Limited is an investment company with a focus on early-stage technology companies.

Material Debt

The Company has the following outstanding loans:

£ 1,333,019.00 loans from Optimal Strategies Limited, Optimal Med Limited, Optimal Claim Limited, and Osun Holdings Limited at an interest rate of 0%. The loans are to be repaid when i) the Company’s net profits exceed £100,000 per annum and ii) repayment has been agreed via investor majority consent (or otherwise on an exit). All companies listed are owned by the founders of Frost Money Ltd.

The funds raised from this investment round will not be used to repay these loans.

Runway

The company has been operating on a monthly cash burn rate of c. £125,000 until February 2023. This will be reduced following this round due to a lower need for spend on technology development and management actions taken to reduce expenditure. The reduced expenditure is not expected to impact revenue traction or product development. The company will therefore reduce monthly cash burn to £70,000, which will ensure sufficient funds for 9 months runway.

Lead Investment

Please note, £707,000 of the raised funds reflected in the campaign were received by the company in September and October 2022. These investments are a part of the same round and are on the same terms as Seedrs investors.

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

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Only shareholders can access this page

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

Buy shares

Only shareholders can access this page

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

Buy shares

Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This campaign for Frost has been approved by Seedrs Limited (trading as Republic Europe) ("Republic Europe", "us" or "we"), as of 17 March 2023 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.

Republic Europe does not make investment recommendations to you. No communications from Republic Europe, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Republic Europe does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Republic Europe, you should consult a professional adviser.

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 £12,550,000

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.

Pitch type

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

Learn more about pitch type on Seedrs

Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

Learn more about investing and pre-emption rights.

Nominee investment

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Nominee investment.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

Learn more about Custodian here

Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Nominee investment). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

Learn more here

Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

Security Token

A security token is a digital asset that represents ownership or other rights. It is a digital form of traditional investments. In the future, you may be able to trade your investment through compatible exchanges.

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