Designer & manufacturer of E-Bike technology, on a mission to sell to global bike brands.
Business overview
| Location | Glasgow, United Kingdom |
|---|---|
| Social media | |
| Website | www.freeflowtechnologies.com/ |
| Sectors | Automotive & Transport Mixed Digital/Non-Digital B2B |
| Company number | SC420118 |
| Incorporation date | 22 Mar 2012 |
Investment summary
Business highlights
- Completed MVP - Compact mid-drive eBike solution
- Patented technology around the world
- Looks & rides like a normal bike, even with the power off
- Serviceable at any bike shop in the world
Key features
Idea
Introduction
FreeFlow sells an eBike motor, allowing riders to have an eBike that looks and rides like a normal bike with all the benefits of rider assistance. It can be serviced locally and quickly, replacing parts, rather than the whole system. At the core of the motor is the innovative, patent protected transmission system. Selling initially to handmade, influencer bike brands, with development orders from national SME brands and significant engagement with global blue chip bike brands.
Substantial accomplishments to date
Development Milestones
- Completed development of MVP
- Sold first 30 systems for test & development
Customer Traction
- 12 of those brands are developing bikes for launches already
- One customer launched a bike with our system at Goodwood Revival 2022, generating repeat orders
Brand Traction
-Excellent traction with blue-chip global brands, several of whom have ridden demo bikes
-Includes 2 international bike consortiums
Awards
- StartUp Awards Scotland 2022 - category winner
- Scottish MTB Awards 2022 - Scottish MTB Product of the Year for Innovation
Monetisation strategy
FreeFlow is an OEM supplier of eBike motors to the bike industry, aiming to supply high volume to blue chip bike brands. We have segmented the market into three tiers which we plan to go after:
Use of proceeds
Key planned allocations are as follows:
Alongside this, we will allocate funds towards important expenses such as continued patent registration, UL certification, and stock holding to maintain rapid fulfilment.
Key Information
Rolling Raise
The company is aiming to run a second institutional funding round of £2M to accelerate growth & exit, targeted for 6 months’ time. If the funds are raised within 3 months, the share price will be the same. After 3 months, the price will be adjusted to reflect FreeFlow’s progress.
Related parties fees
Pursuant to the terms of the investment agreements, certain shareholders of the Company (and some of their professional advisors) are contractually entitled to the following one-off and ongoing fees payable by the Company.
- Kelvin Capital, a one-off arrangement fee of 5% of funds invested (plus VAT).
- Equity Gap, a one-off research fee of 5% of funds invested (plus VAT).
- Wright, Johnston and Mackenzie LLP (Equity Gap's legal advisors), legal fees of £2,000 (plus VAT and expenses).
- Davidson Chalmers Stewart LLP (Kelvin Capital's legal advisors), legal fees of £12,750 (plus VAT and outlays).
- Equity Gap, a monthly monitoring fee of £300 (subject to certain increases due to inflation and pro rata increases in line with further investment by members of the Equity Gap investment syndicate).
- Kelvin Capital, a monitoring fee equal to the greater of (i) £12,000 per annum; and (ii) a per annum sum equal to 1.25% of the aggregate sum invested by members of the Kelvin Capital investment syndicate (payable monthly and subject to certain increases due to inflation and pro rata increases in line with further investment by members of the Kelvin Capital investment syndicate).
Share Classes
The company currently has 2 classes of shares, Ordinary Shares and A Ordinary Shares. All investors in this round, including Seedrs investors, will be receiving Ordinary Shares. The rights attached to both share classes are in all material respects equal (1x non-participating preference on liquidation and exit and voting rights).
Ownership structure
FreeFlow is majority-owned (65.4%) by a series of EIS funds and financial intermediaries. The founder, Neil MacMartin, owns 16.3% of the company and has no other ongoing role. The management team has 7% plus 9% in options.
Management team commitments
The Director of Finance & Operation, David Milton, is a director at Good Story Limited, his Wife's retail business. The company has no commercial relationship with FreeFlow and demands less than 1 hour of work a month from him.
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