Connecting modern parents with unique and inspiring kids products.
Business overview
| Location | London, United Kingdom |
|---|---|
| Social media | |
| Website | www.kidly.co.uk |
| Sectors | Clothing & Accessories Digital B2C |
| Company number | 07672877 |
| Incorporation date | 16 Jun 2011 |
Investment summary
Business highlights
- Over £50 million gross sales to-date
- 190,000 active customers (last 12 months)
- Over 1 million orders shipped since launch
- Our own brand, KIDLY Label, accounts for 40% of units sold
Key features
Idea
Introduction
When our founder, James, had kids he found shopping for them outdated and uninspiring. With his 15 years helping ASOS bring fashion into the digital space, he believed the modern parent was ready to shop in a new way.
Launched in 2016, KIDLY is a modern store for 0-5s offering design-led & genuinely useful products, all wrapped up in an effortless experience, from website to door.
We started offering 3rd-party brands. Then, in 2019, added our own collection of quality, modern, must-haves - KIDLY Label - focusing on thoughtful design & planet-friendly materials.
KIDLY Label now has 250+ options, an army of fans & drives our highest repeat rates. It’s our most-loved brand, accounting for 40% of all units sold.
We believe the time is right to accelerate KIDLY Label’s amazing potential, while rationalising the other brands we offer, keeping only those that truly complement our own.
The goal of this strategy is to position the business to achieve sustainable profitability, from which we then aim to scale.
Substantial accomplishments to date
2016
- Launched in May.
2018
- Both our IE and US websites opened and reached 17% of revenue in the quarter before the pandemic.
2019
- Launched KIDLY Label with seven options of our Ribbed Legging.
2020
- KIDLY Label launched into footwear, first with the Rain Boot and then the Jelly Sandal, which has now sold over 100,000 units.
- We welcomed our first institutional investor, Hargreave Hale AIM VCT.
2021
- We added Toys and Feeding to our range, winning 2 industry awards for our Folding Bucket & Spade Set and our Sensory Nesting Balls.
2022
- Launched KIDLY Unlimited, our free-delivery-for-a year service.
- We received our 1 millionth order.
- Winner of Best Online Retailer of Preschool Products at the Progressive Preschool Awards.
- Launched KIDLY Label on Next.co.uk.
2023
- We passed £50m in gross sales since launch*.
- KIDLY Label reached 250+ options.
- KIDLY Unlimited passes 10,000 paying subscribers.
- Launched our first crowdfund to help accelerate the growth of KIDLY Label
Monetisation strategy
We sell things for kids from our website directly to our customers. Currently we sell a range of 3rd party brands that generate 75% of our revenue*. We also sell our own label, KIDLY Label, which accounts for 25% of revenue*.
Our strategy is to grow the mix of KIDLY Label. It is our most loved brand and it achieves a 65% margin (that's profit we make versus the price we pay, after any customer discounts or markdowns), versus a 43% margin achieved by the 3rd party brands.
We sell to UK customers via kidly.co.uk and recently reopened kidly.ie for our Irish customers, after a covid-enduced hiatus.We also have a kidly.com, which serves US customers. We closed this for the same reasons as Ireland, but hope to re-open it again soon.
We recently were approached by NEXT to sell KIDLY Label via their platform. We launched our first range with them in November 2022 and hope to introduce some other strategic wholesale partners soon.
*Revenue data from unaudited management accounts.
Use of proceeds
We aim to use your investment to accelerate the production and growth of the KIDLY Label range, targeting a 250% increase in revenue in the next three years.
We aim to grow our capability to increase its footprint, with more strategic retail partners alongside NEXT.
We intend to invest £500k in brand marketing to increase our UK awareness beyond paid marketing channels.
Key Information
Share Class
Kidly has 6 classes of shares: A Ordinary, B Ordinary, C Ordinary, D Ordinary, E Ordinary and F Ordinary shares. All investors in this round, including Seedrs investors, will be receiving interests in F Ordinary shares.
All share classes other than the C Ordinary shares are voting. F Ordinary shares and E Ordinary shares have an EIS compatible 1x non-participating preference (see below). The share rights are otherwise the same across all share classes.
On an exit or liquidation, F Ordinary shares will first receive their investment back from the proceeds, following which the E Ordinary shares will receive their investment back. The remaining proceeds will then be shared between the other share classes pro-rata to their holding. F and E Ordinary shareholders can convert their shares into D Ordinary shares on demand ahead of an event, so they will be able to benefit from the growth in the Company if a pro-rata distribution of the liquidation or exit proceeds would provide a better return for them.
Convertible Loan
The company has the following outstanding convertible loans, which may convert to equity after this round and dilute existing shareholders:
A £900,000 convertible loan from Hargreave Hale AIM VCT PLC, with the following key terms:
Interest rate: 10%
Conversion trigger: the loan and interest will convert on:
• the election of the investor
• the election of the Company, provided it has reported profit after tax in the previous financial year
• a Company exit (IPO, asset or share sale)
Conversion price: will be the lower of:
• £20.23; or
• a price determined by:
• an IPO opening or listing share price
• the share price of the previous funding round before immediately prior to conversion; or
• a trailing EV/Sales ratio of 2.3x applied to the previous financial year
Share class: Ordinary D or E shares
Repayment terms: the CLN plus interest will be repayable by the Company on:
• the Company being wound up / becoming insolvent etc.
• the date being 5 years from payment of funds (paid in two tranches between April and July 2020)
A £1,500,000 convertible loan from Hargreave Hale AIM VCT PLC, with the following key terms:
Interest rate: 10%
Conversion trigger: the loan and interest will convert on:
• the election of the investor or
• a Company exit (IPO, asset or share sale)
Conversion price: will be the lower of:
• £28.81; or
• a price determined by:
• the post-money fully diluted share price calculated by applying a 2.0x EV/Sales ratio to the actual net revenue for FY 2023 (y/e 31 Mar 2023)
• the lowest price per share at which equity is issued pursuant to a subsequent funding round prior to such conversion;
• an IPO opening or listing share price or the price per ordinary share determined by an Exit Event (other than a Listing), less a discount of 20% for each ordinary share.
Share class: F Ordinary Shares or, at the election of the lender, any other class of Shares in existence on a Conversion Date.
Repayment terms: the loan plus interest will be repayable by the Company on:
• the Company being wound up / becoming insolvent etc.
• the date being 5 years from pa
Payment Plan
The company currently has a payment plan in place with a logistics provider, with an overdue balance as at 31.03.23 of £125k. Payments against the account are expected to be up to date by the end of May.
Funds from this round will not be applied towards this payment plan.
Investor Perks
Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.
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