Riversimple is a car manufacturer and service provider pioneering ‘next-generation’ H2 electric vehicles
Business overview
| Location | Llandrindod Wells, United Kingdom |
|---|---|
| Social media | |
| Website | riversimple.com/ |
| Sectors | Automotive & Transport Mixed Digital/Non-Digital Mixed B2B/B2C |
| Company number | 09623909 |
| Incorporation date | 4 Jun 2015 |
Investment summary
Business highlights
- Applying for Future Fund, not conditional - see Key Info
- 3 successful crowd rounds - 1,000+ investors across 21+ countries
- Part of Innovate UK grant consortium for hydrogen value chain
- 18+ years developing the technology & business model
Learn more about convertible loan campaigns.
Idea
Introduction
Riversimple aims to offer customers a truly affordable, hassle free, fun-to-drive eco car, delivered as a complete and cost-transparent subscription service.
Our entry vehicle, the Rasa, is a zero emission electric car, powered by hydrogen rather than batteries. Our first production run is well underway with Rasas destined for a 12 month trial with the public.
We plan to follow the Rasa promptly with a light commercial van, and a 5 seat family vehicle as the network of filling stations matures.
Rather than selling our vehicles, Riversimple will provide them as a service, with a single monthly fee which covers the car, the maintenance, insurance and all fuel.
We successfully raised £2M+ in 2 previous crowd rounds, and are partnering with Seedrs again to build our movement and bring our brand of sustainable, clean mobility to market.
This is an opportunity to have a stake in a car manufacturer designed from a clean slate to be sustainable – financially, socially AND environmentally.
Substantial accomplishments to date
The latest Rasa is the culmination of 18 years’ development and both Innovate UK and Business Wales have filmed Riversimple as a success story.
We have recently been awarded two new grants, one from OLEV for £1.25M to support the build of our first low volume production run, and one from InnovateUK for £0.5M to support deployment of cars in the Milford Haven Energy Kingdom project.
Through 3 successful crowd rounds, we have built an investor base of over 1,000 shareholders from over 20 countries.
3000+ people have expressed a desire to be customers, some from as far away as NZ and Japan.
Collaborations have been sought from India, Dubai, Sweden and China - Riversimple accompanied the Prime Minister on her trade delegation to China in January 2018.
Back in the UK, we have installed a hydrogen refueller in Abergavenny for the Clean Mobility Trial and we have a shortlist of households, car-sharing schemes and organisations that will be trialling the Riversimple Rasas, including Monmouthshire County Council, Welsh Water and the NHS.
As a pioneer in the circular economy, Riversimple has been named as an Emerging Innovator by the Ellen MacArthur Foundation and one of the world’s top 100 disruptive companies by Disrupt100. Riversimple MD Hugo Spowers was invited to addressed the European Investment and Central Banks’ Annual conference in Luxembourg.
During our Clean Mobility Trial we aim to achieve some 250,000 miles of clean mobility.
Monetisation strategy
Through a subscription service, Riversimple aims to generate a regular, resilient income from a steady customer base, over the long term, through dividend payments.
As a customer, you take a car for 1-3 years and pay a monthly fee that covers everything: insurance, maintenance, recovery, tax, and fuel even. When the subscription ends, customers can choose to renew it or return the car, and we’ll supply it to a 2nd customer, 3rd, 4th and so on.
Our model gives us access to both new and 2nd-hand customers. Opening up a significant opportunity for the Rasa, which we will market initially as a local, commuter car around existing hydrogen filling stations
As our income comes from the cumulative number of vehicles in service rather than the number ‘sold’ annually, our revenue is much more resilient in economic downturns. We also ‘break even’ at much lower numbers than the current industry because the tooling cost for carbon fibre is substantially lower than for steel-bodied cars.
Use of proceeds
Through 3 successful crowd rounds between 2017 and 2019 we have raised over £2.75M. Money raised has funded important software and hardware developments and supported vehicle builds. We have also installed a hydrogen filling station in the centre of Abergavenny, Monmouthshire.
Proceeds from this convertible loan will be used to recruit more technicians for our build programme and prepare for the launch of The Clean Mobility Trial as soon as Covid constraints allow. We have a shortlist of customers waiting to participate in this trial, both households and organisations.
The next step will be to expand the engineering team and kick off volume production engineering to enable us to reach commercialisation by our target, end of 2022.
Disclosures
Corporate structure
Riversimple has a different corporate and governance structure to normal investment opportunities on Seedrs. This means that the share rights and protections that investors receive will differ from the standard Seedrs approach.
Investors in the Riversimple campaign on Seedrs will receive shares in Riversimple Holding Limited, which is the holding company for four wholly-owned subsidiaries. The assets and operational elements of the business are split amongst these four companies. Please see the attached document ‘Riversimple corporate structure summary’ for further information.
Riversimple Holding Limited has two classes of share, “A Custodian Shares” (voting) and “B Investor Shares” (non-voting). The rights attached to these share classes and further information or the corporate structure can be found in the attached document ‘Riversimple corporate structure summary’.
Key Information
Future Fund 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: 20%
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
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.
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).
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 intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. The Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is not conditional upon receiving matched funding from the Future Fund. Seedrs will complete the investment and transfer the funds raised even if the application for Future Fund investment is rejected. We will ensure an application is made to the Future Fund for matched funding and will not complete until we know the outcome of the application. But if the application is rejected, the company will still be permitted to complete the investment round.
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 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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