Wrisk

Idea

Introduction

Insurance is a great idea, but it hasn’t kept pace with society.

Wrisk is giving it a long overdue digital upgrade. Manage different types of insurance seamlessly through a single app. Understand how you are priced and what you can do to reduce your risk. Wrisk is insurance for the connected generation.

Following the national roll-out of Wrisk’s contents proposition later this year, we intend to expand our service to cater for other insurance needs, bringing everything together into one simple plan that grows with our customers.

Wrisk is about more than just buying insurance – it’s about managing and understanding your risk. Developed using advanced data science and actuarial techniques, our unique Wrisk Score is like a credit score for personal risk, enabling better, more transparent pricing.

Wrisk is also changing the way people pay for insurance by using top-up and balance. Our perpetual policy, billed monthly (like Netflix), allows customers to change or cancel without penalty.

Convertible details

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

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

• Discount – conversion at a 20% discount to the valuation set by a Trigger Event.
• Valuation cap of £15,000,000
• 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 Ordinary 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.

• Longstop Date is the 15th March 2019.

• 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 £8,643,976 on a fully diluted basis (this is based on the valuation of Wrisk's last funding round and approved EMI scheme).

The convertible would also convert to equity at this price in the event of winding up or liquidation of the company.

Intended impact

A whole generation seems to distrust insurance. But being uninsured leaves them vulnerable in emergencies:

• 61% of people who rent don’t buy insurance.
• 31% of millennials who travel never buy travel cover.
• 30% of millennials who drive are not the main policyholder.

It doesn’t have to be this way. Through challenger banks and budgeting apps, people are more ready to engage with financial services than ever – on their terms – if we make it easy and accessible. Strive to be ethical and fair. Build and maintain an open, responsive dialogue. Focus on people, not policies.

By engaging people through their phones and providing holistic cover, Wrisk will make it as effortless as possible, for as many as possible, to get the insurance they need, meaning fewer end up in long-term hardship when the worst happens. Beyond this, prioritising convenience and a fresh approach to transparency has the potential to engage brand new customers – kickstarting an entirely new mass market for insurance.

Substantial accomplishments to date

Operating in such a complex and highly regulated domain, launching our Beta and becoming “post-product” was a huge milestone for us. Early signs from our beta customers are encouraging...

Additionally, we have partnered with industry heavyweights Munich Re and Hiscox, and have commercial agreements in place with the likes of BMW, with whom we are due to deliver insurance for cars sold in the UK.

We have completed a significant number of milestones, which could not have been achieved without the dedication of an experienced team of insurance and technology professionals.

Monetisation strategy

Wrisk will be an agency – acting on behalf of major insurance companies such as Munich Re and Hiscox – respected incumbents known to support innovation in their partners. The agency model, known as a Managing General Agent ('MGA'), is one that’s widely used in the insurance sector.

As with all MGAs, the insurance liabilities remain on the balance sheet of Wrisk’s insurance partners, and as such our own revenue will come from:.

1. Commission per transaction (15-25%), paid by our insurer partners.
2. Profit commission, calculated annually and paid by our insurer partners.
3. Licence fees for the use of Wrisk in those territories where an MGA model is not appropriate.

Beyond these traditional sources of revenue, our roadmap also includes exploring additional derivative sources, such as referral fees in respect to non-insurance products, and possibly even licensing the Wrisk Score as a proxy rating tool for insurers in countries where traditional rating data is more scarce.

Use of proceeds

Why we are raising on Seedrs now.
Things change… and so have we.

Led by Oxford Capital, Wrisk completed a £3M seed round last year to build a world-class team, committed to making insurance simple, transparent and personal. A further £600K from 500+ investors via Seedrs gave real validation of our concept.

Since then, we have achieved beyond our expectations, with positive feedback from paying customers, contact centre infrastructure and technology in place to support our phase 1 partnership with BMW and a signed non-binding MOU to expand that partnership.

Given we believe that we are on the cusp of significant growth, we’ve decided to delay Series A until Q1 2019, as we build customer proof points and contracted revenue. This requires us to raise bridge capital via convertible equity to support a team of up to 30 FTEs focused on delivering:

• Core enhancements based upon FCA sandbox learnings.
• Q3 App Store launch of contents proposition.
• Q3 Phase 1 of BMW partnership
• Q4 Beta version motor insurance within app

Important Notes

Please note that the company has 2 convertible loans outstanding.
• The first is a £750k convertible loan, the details of which are as follows:
- The loan accrues 5% interest per annum.
- £250k including accrued interest will convert to ordinary shares at a 20% discount to the pre-money valuation set by the 1st Seedrs crowdfunding round (£1.95).
- £500k including accrued interest will convert to ordinary shares at a 20% discount to the pre-money valuation set by a fundraise of at least £1m at a valuation greater than £9m.
This fundraise will not trigger conversion.
- Long Stop Date: 31st December 2019.
- If the convertible is not triggered before the Long Stop Date the investor can decide to either convert the convertible at a 20% discount to the valuation set by an independent valuation advisory firm, or elect to redeem the loan at the nominal amount of the loan outstanding.

• The second is a £192,000 convertible loan, the details of which are as follows:
- The loan is interest free.
- After the 1st January 2019, the Company can request for the loan to be fully paid up or converted to Ordinary shares at the subscription price of the next equity fundraise.

The conversion of these loans will lead to investor dilution.

Please also note that certain investors in the company have A Preference Shares. The A Preference Holders can elect to receive a preferential return on a distribution of capital up to the value of their investment or can participate in the distribution of capital on a pro rata basis (a non-participating preference). The total invested in the A Preference Shares is £1,650,000.