Veeqo

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.

We are raising some this money for cashflow as the grant money from the Welsh Government is taking longer than expected to arrive and we have runway into 2019 while we negotiate a larger funding round with VC's.

Convertible Details

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

The key terms that apply to the Veeqo convertible are summarised below and set out in further detail in the "Key Terms" document attached in the Documents section.

• Discount – conversion at a 35% discount to the valuation set by a Trigger Event.
• Valuation cap of £14,000,000
• Conversion is triggered by ("Trigger Events"):
o 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 company issuing of equity shares;
o A Change of Control of the company (transfer of more than 50% of the share capital); or
o An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.
• Conversion upon a Trigger Event will take place at the lower of (i) share price set by Trigger Event discounted by the discount; and (ii) a company pre-money valuation equal to the Valuation Cap.

• 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 £9,220,000 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.

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.x

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

*Unaudited management accounts.

Please note, Veeqo has a director loan of £160,000, not to be repaid until the company receives further funding over £1,000,000.