The Dip Society

Idea

Convertible Details

This investment round is being raised by way of a convertible instrument.

The key terms that apply to the The Dip Society convertible are as follows:

► Discount – conversion at a 20% discount to the valuation set by a Trigger Event.

► Valuation cap of £6,000,000

► Conversion is triggered by ("Trigger Events"):

◆ An Equity Fundraise – defined as the Company raising investment capital of at least £150,000 from one transaction or a series of transactions, in exchange for the company issuing of 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 convertible agreement.

If conversion has not been triggered by the longstop date shares will be issued on the longstop date at a valuation based on the lower of (i) the lowest price of any Ordinary Share issued after the date of this Agreement; and (ii) a pre-money company valuation of £1,500,000 on a fully diluted basis. The convertible would also convert to equity at this price in the event of winding up or liquidation of the company.

Introduction

The Dip Society is a premium food brand on a mission to disrupt the chilled food market by creating innovative and healthy flavours of dips, pates & snacks. With all products having 10 or less ingredients they are low in fat, low in salt, gluten-free and totally natural with no preservatives or additives.

As a strong point of difference, the brand promotes provenance by using key ingredients from other British food producers, as well as being made in the UK at a Lincolnshire BRC-accredited facility.

The Dip Society makes healthy and nutritious snacking products, with fuss free recipes and zero compromise on flavour. Our customers know they can rely on our table-ready dips and pates for a quick and easy family snack or perfect for a party.

After years of working on our brand and product development we are now ready for UK wide distribution and we are inviting like-minded people to join us change the landscape of the dip market.

Intended impact

The Dip Society has shown strong growth in customer base and brand following over the last year. Through investment and beyond we aim to broaden our reach through new distribution channels, fabulous new flavour combinations and promoting bright snacking and entertaining ideas.

“Overperforming in a robust category, delivering +50% sales growth YOY….continually bringing new, innovative and different flavours to market” Jacques Thudichum, Chilled Category Buyer OCADO.com

“The Dip Society has brought fresh air into what was a predictable category that was screaming for a revolution. The resulting selection is new flavours for all tables and occasions, from parties to me-time”
Dan Rodriguez, buyer Whole Foods Market.

Innovation is key for product and brand development and this summer we plan to launch ‘Dip on the Go’ – a gluten and dairy free houmous and cracker snacking combo. This marks a significant expansion of market share into the snacking and Food to Go market which is worth an estimated £20.2 billion per year.

Substantial accomplishments to date

PRODUCTS
• Two Great Taste Awards…so far!.
• Winners of the Lincolnshire Food Innovation Award 2015.

BRAND

• Healthy, fresh and fun, The Dip Society has a distinctive brand personality and design, attracting and keeping customers interested and brand-loyal.

DISTRIBUTION
• The current range of five vegetarian dips and two sustainably-sourced fish pates are currently stocked in Ocado.com, Booths, Selfridges and farm shops and delis nationwide as well as with premium wholesaler Wholegood.
• At Ocado.com The Dip Society was a leading independent dip retailer in 2016, with a growth rate of 52.4%, vastly outperforming the overall dip category growth of 19%. Growth in Q1 2017 was 143% higher than Q1 2016.*
• Awaiting final confirmation of a summer listing with a high-end multiple retailer.

SOCIAL MEDIA & THE ‘SOCIETY’
• At The Dip Society we want everyone to get involved and ‘join us in a dip’. Our mission is just getting started, with our Instagram audience tripling in the last 3 months and Twitter followers increasing to an average of >120 a week.
• We run competitions and collaborations with like-minded food and lifestyle brands (such as Innocent, Nairns, Peter’s Yard and WeTrain).
• Our social content not only shares delicious recipes and foodie inspiration but also gets our Dip Society friends such as Fearne Cotton and Dawn O’Porter involved through our foodie interview ‘Sit and Dip’.

*Source: Unaudited management accounts

Monetisation strategy

We aim that by the end of 2018 The Dip Society products will be stocked in a selection of the multiple retail chains and convenience food stores and will be a household name and fridge staple for it’s target customer – the go-to for delicious and healthy dips and snacks.

The market is dominated by supermarket own label and we believe that no branded offering have yet made a real impact. We consider The Dip Society to be ideally placed to take advantage of the opportunity and disrupt the sector with stand-out branding and innovative flavour combinations.

Use of proceeds

Investment monies would enable The Dip Society to build on current successful traction in the market and provide funds to not only develop and launch new products but also support sales and marketing promotions and in-store campaigns which require vital working capital.

Assuming a £300k raise:
£125k in sales & promotional support for new and existing stockist listings and product launches.
£125k marketing spend to provide a major push on digital presence; marketing interaction and social media, all of which will all strengthen the branding and consumer appeal of the company.
£50k investment in machinery to increase productivity and ensure limitless supply and new packaging to improve shelf-life and brand awareness, including the first table-ready branded dip pot on the market.

Please note:
- PREFERENCE SHARES: the company has an existing institutional investor who holds Preference Shares. On an exit, liquidation or winding up, the preference shares are entitled to a preferential return equal to the original subscription price for the shares. Ordinary shareholders would then receive the amount of their original subscription price for the shares, before any remaining proceeds are distributed pro rata amongst all shareholders.

- EXISTING DEBTS: the company has two outstanding loans totalling £56,000 from related parties. None of the proceeds of this round will be used to repay these loans.