We make beautiful, spacious eco-friendly homes...for all. Designed to last. Built offsite in the UK.
Business overview
| Location | Norwich, United Kingdom |
|---|---|
| Social media | |
| Website | www.the-nhouse.com |
| Sectors | Property Non-Digital Mixed B2B/B2C |
| Company number | 10453844 |
| Incorporation date | 31 Oct 2016 |
Business highlights
- Full 'mortgage friendly' quality accreditation achieved (BOPAS)
- Sales pipeline of over 30 houses being prepared or in planning
- Highly experienced management team and award winning architects
- Demand for houses is 300,000 per year in the UK
Learn more about convertible campaigns.
Idea
Introduction
nHouse is a young disruptive housing company challenging the status quo of the UK residential construction sector.
We make houses using modular methods - which means they are constructed in separate parts in a factory before being transported and connected together at a building site.
The 12 homes in our range are eco-friendly, full of lifestyle technology, spacious, have healthy home attributes, are low cost to run and are made of high-quality materials - we have BOPAS accreditation meaning they are mortgage friendly and have a 60 year structural warranty.
Our market includes self-builders, developers and volume house purchasers (e.g. Housing Associations).
The UK government wants the 'offsite' sector to help solve the housing crisis, tackling the 100,000 annual housing supply shortfall, particularly because we can make a house in 12-16 weeks.
We aim to sell hundreds of homes annually. Since 2016 we have been backed by over 1915 private investors.
Substantial accomplishments to date
Sales.
By August 2020 we aim to have completed our fifth house.
Between 2020 March-May, we received 300+ sales enquiries. This could average to 1,400+ sales enquiries over the next 12 months.
We aim to convert 3% of inquiries into sales. Following an 8 month lead-to-sale pipeline this would result in 24 houses being sold next year (£4.8m revenue.)
30 nHouses are now in the planning process. We have signed an MOU with a major developer for 50 homes to be supplied by nHouse on a scheme with planning in Lancashire.
Money.
Since launch we have raised over £1.7m from 1,600 investors via three crowd raises and private investment.
nHouse have contracts equating to over £800K of income to date.
A report by McKinsey predicts offsite sector value to be $130 billion by 2030
Products.
nHouse has developed a range of 12 properties, from flats and bungalows right up to large six-bed houses, using a variety of construction materials, finishes and specifications as well as optional extras.
We have selected manufacturing partners, secured supply chains, reached design and engineering 'freeze' on core range and achieved BOPAS accreditation.
Marketing.
nHouse has created a strong brand with brochures, a website and other marketing materials.
We have exhibited at numerous conferences and events including Grand Designs and ModMatch.
We are ranked on the front page of Google for modular house searches.
We have been written about by major UK newspapers like the FT, The Times, The Guardian, and The Sun.
Monetisation strategy
Our business plan outlines planned sales and revenues:
2021 - 24 houses
2022 - 72 houses
2023 - 216 houses
nHouse operates with a 7% Gross Margin and aims to increase this over the next few years.
This Seedrs round is designed to provide funds to 'bridge' to a Series A / VC round
The Series A / VC round is looking to raise over £4m and to take place in 2021. A much higher company valuation target is set for 2021
Future VC funds will be used to expand sales, increase awareness and market share, increase production capacity and improve margins.
After 2025 we aim to generate a strong return for shareholders via either a listing or trade sale.
Use of proceeds
The £50K will support working capital to extend the runway of nHouse into 2021.
Disclosures
The company has the following outstanding loans:
1. £38,000 shareholder loan. This loan has no interest and no agreed repayment date.
2. £37,855 director loan. This loan has no interest and no agreed repayment date.
None of the funds raised will be used to repay these loans.
Key Information
Convertible key terms
This investment round is being raised by way of a convertible equity investment structure, in this case, an 'advanced subscription agreement'.
The key terms that apply to the Company’s advanced subscription agreement are set out below. See also attached Key Terms document for further details.
Discount – conversion at a 20% discount to the valuation set by a Trigger Event.
Valuation cap of £30m.
Conversion is triggered by ("Trigger Events"):
- An Equity Fundraise – defined as the Company raising investment capital of at least £500,000 from one transaction or a series of transactions, in exchange for the company issuing Ordinary shares;
- A Change of Control of the company (transfer of more than 50% of the share capital); or
- An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.
- Longstop Date is 12 months from the date of the advance subscription agreement.
If conversion has not been triggered by the Longstop Date shares will be issued on the longstop date at the Default Share Price, which is the lower of:
- the lowest price of any shares issued after the date of this Agreement; and
- a price per share based on a pre-money company valuation of £5,375,987.30 on a fully diluted basis.
- The convertible would also convert to equity at the Default Share Price in the event of winding up or liquidation of the company.
EIS relief
This investment round is being raised by way of a convertible equity investment instrument, in this case an "advanced subscription agreement" (or ASA) - which is structured to meet HMRC requirements for EIS relief eligibility.
Investors who intend to seek EIS relief on this investment should note that HMRC published guidance on claiming EIS relief on an advanced subscription agreements/convertible instruments in January 2020.
The guidance provides five key requirements; no refunds; no variations, cancellations, or assignments; no interest-bearing on the instrument; no investor protections; and that the agreement, must contain a longstop date. It also states that the longstop date is "expected to be no more than 6 months from the date of the agreement".
We have structured this advanced subscription agreement to meet all five of the requirements, but the Longstop Date will be 12 months from the date of the agreement.
nHouse has previously received advanced assurance under the EIS schemes. As this statement from HMRC is guidance only and there is no requirement in the rules or legislation that an ASA must have a 6 month longstop date, we intend to claim EIS relief on the instrument upon conversion and establish that the investment meets the necessary conditions for EIS relief. However, there is a risk that EIS relief will be denied by HMRC due to the longstop date guidance.
Investors should seek their own advice if this is material to their investment decision. Seedrs cannot provide tax advice. Tax treatment depends on individual circumstances and is subject to change in the future.
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