We reduce isolation and maintain independence for older adults using TV video calling and monitoring.
Business overview
| Location | Belfast, United Kingdom |
|---|---|
| Social media | |
| Website | www.kraydel.com |
| Sectors | Healthcare Mixed Digital/Non-Digital Mixed B2B/B2C |
| Company number | NI638874 |
| Incorporation date | 6 Jun 2016 |
Investment summary
Business highlights
- Awarded funding from the Future Fund - see Key info
- First deployments went live with five NHS trusts in May 2020
- Pipeline of NHS trusts, councils, and other care providers
- Named a supplier on the Crown Commercial Service (CCS) framework
Learn more about convertible loan campaigns.
Idea
Introduction
Kraydel’s Konnect is a system designed to reduce isolation and maintain independence for older adults through TV video calling and remote health and well-being monitoring. Konnect is designed specifically to engage users who may not be comfortable using smartscreen devices. Konnect can make and accept video calls from mobiles, tablets or PCs, from a closed network of supporters (family, friends, healthcare professionals, carers, etc) who use the Konnect app (iOS and Android). They can share photos and videos with the User on the TV.
Konnect operates on a Wi-Fi network, or through a 4G mobile signal (the SIM is integrated in the hub).
The hub has built-in sensors (sound, and motion), and has been integrated with a wide range of environmental sensors and health devices (oximeters, blood pressure monitor, activity monitors) to remotely monitor the activities of daily living to support user independence. Konnect is being used to support vulnerable populations by service (health/care) providers to maintain contact with large numbers of people without exposing health and social care professionals.
Substantial accomplishments to date
It's been an incredible past 18 months for the team at Kraydel which has culminated in a pipeline of almost eighty organisations including NHS trusts, councils, and other care providers who have either deployed Kraydel, agreed to deploy Kraydel and others which are in advanced discussions towards the same.
Here's our story so far: After raising initial seed investment from Hambro Perks, Techstart and RGAX in 2018 we developed a prototype of the system which went into trials in December 2019. We gained market insight from the trials and started to raise visibility in dozens of public and private sector events in the UK and internationally.
In April this year we formally launched the Konnect system with the first live deployments with five NHS trusts starting in May 2020. We have now scheduled 32 deployments and pilots with the NHS, Care Homes and charities over the next few months - with a further forty five in the pipeline.
Extensive discussions are also progressing with several bluechip multinationals around strategic partnership agreements. We are laser focussed on extending our competitive advantage through market knowledge and strengthening the user network. To this end we have joined a number of regional Academic Health Science Networks (AHSNs), are working with the DTI on promotional opportunities in markets such as Singapore, and have been recently appointed as a supplier on the Crown Commercial Service (CCS) procurement platform (SPARK).
Monetisation strategy
Kraydel is already generating revenue. With our C-Level contacts coupled with market conditions that position our technology very favourably we are in a strong position to rapidly scale and build our user network across the NHS and Care Homes.
With Konnect being a complete remote well-being support platform, we expect to deliver substantial ROI for healthcare and home care with a lasting social impact. Our revenue to date is £154,000, and we plan to grow our revenue through sales to the NHS, Home Care, Local Authorities, and consumers (introduced through either the NHS or Home care providers).
In addition to the revenues from system deployment, we are also working to develop revenue streams based on analytics and use of our system in clinical trials.
• We are aiming for our pilots to convert into paid sales before year-end.
• We are selling the product as a monthly subscription with minimum 1-year commitment
• The pricing averages £35 pm plus VAT; tiered based on features and length of commitment.
Use of proceeds
This funding will bridge to a Series-A, targeted for mid-2021. In this time we will continue to fill the opportunity pipeline, establish the Kraydel brand as an Agetech leader, and deploy more Konnect units. The funding will enable delivery of the product roadmap which includes enhanced camera and video calling functionality and the integration of additional third party health and environmental sensors. These features will help to extend our market leadership.
Disclosures
The company has a loan facility with Innovate UK, with an outstanding loan balance of £761,937 and an interest rate fixed at 3.7%. The loan is to be repaid over 3-years commencing December 2021. None of the funds raised will be used to repay this loan.
Key Information
Convertible Loan Note
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu....
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
1. Key terms
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart....
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
Discount: 30%
Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
Redemption Premium: An amount equal to 100% of the principal loan amount
Valuation Cap: £12,000,000
Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount or, if lower, the Valuation Cap share price.
Maturity Date: 36 months from signing convertible loan agreement.
The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
If redeemed, the company will repay the principal together with the Redemption Premium.
If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Or, if lower, at the Valuation Cap share price.
Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
2. Government matched funding
The company has been approved for funding by the Future Fund and £655,000 of investment has already been matched. The total £1,310,000 has been reflected as part of the amount raised. This is to give investors an indication of the total size of the funding round (and potential dilution on conversion).
The investment from this Seedrs campaign will not be matched by the Future Fund.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
3. Conversion to equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
4. Risks
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
5. Secondary market
Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).
6. EIS Relief - past, current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.
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