Veeqo helps online retailers all over the world grow their business by selling on multiple channels.
Business overview
Location | Swansea, United Kingdom |
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Social media | |
Website | www.veeqo.com |
Sectors | SaaS/PaaS Digital B2B |
Company number | 8391581 |
Incorporation date | 6 Feb 2013 |
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Idea
Introduction
In 2018, almost 2 BILLION people will make an online purchase. With over 22% of the world’s population shopping online, ecommerce sales are fast eclipsing in-store sales - and online sellers are the retail billionaires of the future.
Consumer habits have also evolved. Shoppers now expect to be able to purchase from anywhere in the world - whether that’s in a physical store, online, from their mobile phone or across social media.
But running a profitable, growing, omnichannel retail business is incredibly difficult. Managing every order from every sales channel, keeping inventory in sync and shipping orders all over the world becomes an increasingly challenging task for online retailers.
As ecommerce orders grow, it becomes impossible to take care of everything perfectly, and there’s nothing out there that allows retailers to manage their entire business from a single platform. Nothing, that is, except Veeqo.
Convertible Details
The key terms that apply to the Veeqo convertible are as follows:
► Discount – conversion at a 25% discount to the valuation set by a Trigger Event.
► Valuation cap of £14,000,000
► Conversion is triggered by ("Trigger Events"):
◆ An Equity Fundraise – defined as the Company raising investment capital of at least £1,000,000 from one transaction or a series of transactions, in exchange for the issue of Ordinary Shares. The Seedrs fund raise does not count as a transaction;
◆ 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) a pre-money company valuation of £9.22m (which is the fully diluted post-money valuation of Veeqo's last fundraise); or (ii) the price for any share issued after the date of the convertible agreement. The convertible would also convert to equity at this price in the event of winding up or liquidation of the company.
Intended impact
Veeqo is an all-in-one platform that brings every requirement a retailer needs to run a profitable ecommerce operation into one place.
This saves retailers a huge amount of time and eliminates human error. They can ship a high volume of orders significantly faster and with greater accuracy than ever before. Their customers will love them for it - and keep coming back to purchase again time after time.
Our software is used by over 300 retailers around the world, and currently powers an average of £16m worth of sales per month. It’s built around three core pillars: Orders, Inventory and Shipping.
Orders lets retailers view and manage every sale they receive from across all their stores. Inventory syncs all their stock across all stores, so everything is always 100% up-to-date. For Shipping, Veeqo integrates with the major shipping couriers in the world, allowing them to ship up to 250 orders in a single click.
Substantial accomplishments to date
- 2013: Out of frustration of not finding the right software to help him grow his ecommerce business, Matt Warren starts the Veeqo adventure.
- December 2014: Veeqo starts a Seedrs campaign with the intention of raising £250k, raising an actual total of £670k.
- February 2016: Veeqo acquires logistics firm ParcelBright to expand its portfolio of product and increase its revenue stream.
- November 2016: Veeqo processed over 30,000 orders on Black Friday 2016 alone for a value of £1.3m.*
- May 2017: Veeqo moves upmarket and starting price increases from £100 to £375 per month. Customer also start paying a setup fee starting from £1,000
- July 2017: Welsh Government give Veeqo a repayable grant of up to £500,000 linked to creating new jobs in Wales**.
- August 2017: Veeqo hires VP of Global Sales Tom Weeks from one of the UK's leading tech companies, Ve Interactive.
- August 2017: Veeqo launches Scanner, its own hardware device to bring Amazon level warehouse capabilities to all ecommerce companies.
- September 2017: Veeqo launches its own app marketplace to allow 3rd party developer to build and sell apps on the Veeqo platform.
- September 2017: Veeqo monthly revenue grows to £100,000*
*Figures based on unaudited management accounts.
**This grant will be paid back in monthly instalments from 2022 at 0 interest.
Monetisation strategy
Veeqo has a track record of strong financial growth, and is already backed by significant, high profile investors from the worlds of retail and tech.
Veeqo has continued to see meaningful success since the earliest seed round in 2013 at a valuation of £270K and in 2015 there was a public equity round was at a £1.75m valuation in 2015.
We have two sources of revenue:
- Veeqo Platform: 80% of our revenue comes from customers paying for our software. They will pay on average between £4,000 and £20,000 per year. They pay every month or every year.
- Veeqo Shipping: 20% of our revenue comes from shipping rates. Through the ParcelBright acquisition, we have developed a new revenue stream. We enable our customers to access better shipping costs because of our bulk buying price.
- Recently we launched our own hardware device called the Veeqo Scanner. Leasing these to our customer brings in more MRR and ties the customer to Veeqo.
Use of proceeds
With this new investment we will invest into 3 main areas:
-> Product Development: We want to enable our customers to be more successful when they are using Veeqo. We want to give them access to more marketplaces to sell to, provide even more automation and make Veeqo a full circle solution by linking into POS system to provide the "bricks to clicks" to ecommerce companies.
- UK Domination: Veeqo already has a strong footprint on the UK market and we want to strengthen this position by investing into sales and marketing.
- UK: With our new higher pricing (starting from £375 per month) we are creating an outbound sales team to hunt for bigger companies
- USA: 25% of our leads in Q3 2017 came from North America, without a single dollar being spent on marketing to the USA market. To capitalise on this, we are looking to open a US operation in early 2018, dedicated to closing potential customers in America.
*Unaudited management accounts.
Market
Target market
Veeqo targets online retailers in the UK, US, Canada, New Zealand, Australia and Germany selling on multiple platforms with a turnover between £1m and £50m.
Over the past 12 months, our focus has been on moving upmarket and attracting larger retailers to our software. One metric we use to measure this is by looking at our average selling price (ASP). This is the average amount customers pay to use our software on a monthly basis.
Since January 2017 we have increased our ASP from £196 to a high of £432* in September - and this trend is set to continue rising throughout 2018.
There are many benefits to us focussing on a more up-market retailer. We expect that they are less likely to cancel their subscription as Veeqo is more embedded within their business. In addition, we believe that they are more likely to use Veeqo to its full potential, and it's easier for our sales team to sign them up - as these bigger retailers have larger budgets allocated for software.
Characteristics of target market
The size of the potential addressable market is already huge but it is also growing really fast because it is supported by two main trends:
- Rise of Marketplaces (Amazon, eBay …). At the close of 2015, it was estimated that Amazon would have 26% of all U.S. web sales and it is predicted that Global marketplaces such as Amazon, eBay and Alibaba will own almost 40% of the global online retail market within five years. More importantly 49% of Amazon sales come from Third Party Sellers.
- Rise of Online: More people shopped online than in stores for the first time ever on Black Friday in 2015, marking an inflection point for the retailing medium. Retail e-commerce sales worldwide are predicted to grow from $1,548B in 2015 to $4,058B in 2020, so an average of just over 20% per year.
We consider that the immediate Total Addressable Market for Veeqo is around 50,000 Companies and as consequence we can aim for £500-700M turnover Total Addressable Market.
Marketing strategy
The founding team brings two essential expertise to scale successfully a business like Veeqo. Matt has built and exited a successful multi-million ecommerce business (Jura Watches) so he knows the problems of this market and has a large network in the online retail industry.
As director of sales for VE Interactive, Tom Weeks helped them scale to thousands of customers and significant annual turnover. VE Interactive was once valued at over $1.1b and was one of the UK big success stories for tech.
- Developing a Partnership Channel with web agencies: They are often the first point of contact for retailers when they develop their online presence, so they are a natural go-to-market relay for Veeqo. We launched our Partnership programme in July 2017 and we already have seen good activity.
- Outbound Sales: We are creating a 4-person team to purely focus on outbound sales. Our initial testing on this strategy has been very successful, and plan to scale this up rapidly in the immediate future.
Competition strategy
Our competition has been focused on solving this problem for very small online retailers (less than £0.5m turnover) per year, or for the very large ones (over £100m turnover). For the Small and Medium sized online retail market of £0.5-50M per year, there is no fully integrated solution available to our knowledge which offers the level of flexibility and depth of features that Veeqo offers.
There is an inherent barrier to entry on this market: it requires a highly complex platform with 20 different ecommerce integrations. So we believe that any new player in our market will find it difficult to deliver a solution as good as Veeqo.
Other USPs that set Veeqo apart from the competition include:
Innovation: have a significant product team dedicated to constantly improving Veeqo and rolling out new features
All-in-one solution: no need to log in to any other platform to manage and ship multichannel ecommerce orders
Smartphone app: retailers can keep track of their sales from the palm of their hand
*Unaudited management accounts.
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