SquareBook

Idea

Introduction

SquareBook is the auction technology platform for equity capital raises. We’re making IPOs and other equity capital transactions, including private placings and follow-ons, fairer and more transparent, with better outcomes for everyone involved.

Until now, high-growth companies have had one option for an IPO: the traditional book-building process used by investment banks. It's risky, expensive, manual and opaque and hasn't changed in decades.

SquareBook is an alternative. We aim to de-risk the process, offer an optimal way to price shares, and providing better investor selection.

The SquareBook platform combines investor relations with all the tools for executing a deal in one place. We bring together investors with companies and their advisors in one place, and put companies in control of share pricing by using a unique multi-round auction format. The result is a fairer, cheaper, more transparent way to raise capital, finally bringing IPOs up to date with the rest of the finance industry.

Substantial accomplishments to date

- Build-out, model developed and rigorously tested as part of FCA Sandbox, the UK regulator’s innovation hub

- FCA authorisation, recognition in Financial Times and industry press (Euromoney, Fintech Times and more)

- Platform built and tested with engagement from major asset management firms

- First clients signed – one of Europe’s largest pharmaceutical cannabis businesses; european healthtech business

- Inaugural SquareBook IPO Conference held in London, featuring high-profile speakers and panellists from the London Stock Exchange, Schroders, AFME, Aquis Stock Exchange, Baillie Gifford, PwC, RateSetter and more, with delegates from the finance industry, high-growth companies and entrepreneurial community

- Graduate of Tech Nation, the UK government’s tech accelerator programme

- Connectivity with major electronic broker partner built, soon to be announced

- First advisor partnership soon to be announced

- First IPO expected H2 2022

- B Corp application under review

Monetisation strategy

SquareBook has two main sources of revenue:

1. Monthly subscription fees

2. Transaction fees

As standard we charge each company a monthly SaaS fee of £1,000 to use the platform.

When a company executes a deal through SquareBook, it pays a small percentage of the capital raised. The average value of an IPO executed globally in 2021 was $227 million.

The SquareBook platform is designed for different kinds of raise, including share placings and follow-ons (post-IPO deals), which often raise more than IPOs. In Q1 2021 the global value of IPOs was $202.9 billion from 727 deals, while follow-ons raised $247.9 billion in 1,285 deals.

We provide more buyer power to companies; in Europe 10 advisory firms dominate IPOs with 86% market share. By connecting to a wide group of investors through our electronic broker connectivity, we lessen the company’s reliance on those firms and give them greater choice from many more potential advisors. Advisors, in turn, are a major route to market for us.

Use of proceeds

The funds are expected to give us six months runway, which we expect to see us complete a first transaction, sign up at least five issuers to the platform, and connect to a large electronic broker for carrying out settlement through the SquareBook platform.

The full breakdown:

- Product delivery and development: 43%

- Sales and marketing: 37%

- Office, admin, overheads: 14%

- Legal and financial: 6%

The focus of the funds will be on developing our data and analytics capabilities. A key part of our proposition is bringing science and rigorous methodology to the IPO process, replacing the traditional way of pricing, which relies on relationships between bankers and their customers.

Sales and marketing funds costs range from tools to advertising and events – we plan to hold the second SquareBook IPO Conference in London in late 2022. Building our brand and establishing ourselves as thought leaders in the IPO space are key near-term goals.