A pioneering clothing brand delivering next generation knitwear essentials with a carbon-negative impact.
Business overview
| Location | London, United Kingdom |
|---|---|
| Social media | |
| Website | sheepinc.com |
| Sectors | Clothing & Accessories Mixed Digital/Non-Digital B2C |
| Company number | 11226906 |
| Incorporation date | 26 Feb 2018 |
Investment summary
Business highlights
- Revolutionary naturally carbon-negative supply chain.
- £5.5m+ gross revenue since launch in 2020*.
- Over 30k customers and 35%+ repeat rates (>2 yrs) .
- Proprietary supply chain technology delivering 100% transparency.
Idea
Introduction
The $2.5tn fashion industry is responsible for around 10% of global CO2 emissions.
Sheep Inc. is a pioneering clothing brand that uses proprietary technology and supply chain innovation to deliver next generation knitwear essentials with a naturally carbon-negative footprint. Achieved by working with cutting-edge regenerative farms and supply chain partners that run on 100% solar power.
Custom built supply chain technology gives real-time insight into production processes and NFC technology is integrated into each supremely soft garment. A tap of the phone shows each garment’s unique digital fingerprint. Giving detailed information about the environmental impact and background about the farms and manufacturers. It even connects you with a sheep from the same farm the garment’s wool is from.
Sheep Inc. aims to fundamentally change how we view and purchase clothing. Delivering best-in-class products with a unique customer experience and unparalleled sustainable credentials.
Substantial accomplishments to date
Sheep Inc. has achieved £5.5m+ in gross revenue since 2020 and turned a profit in the month November 2022*. It has achieved global press recognition as a pioneering brand proposition that is ushering in a new era in fashion and won multiple awards, including Draper's Supply Chain Innovation Award and Positive Luxury's Environmental Innovator of the Year award.
Strong growth & market position:
• Sheep Inc. has 30,000+ loyal customers and industry leading repeat rates of 35%+ from our '19 &'20 cohorts, with best-in-class customer satisfaction scores: 4.9/5 on Google Reviews and a 98/100 CSAT (customer satisfaction) score.
Naturally carbon-negative impact:
• All products are created using a revolutionary naturally carbon-negative supply chain. The highest quality Merino wool is sourced from farms that adopt regenerative farming practices that maximise the soil’s natural capacity to absorb and store CO2e. All garments are produced using Shima Seiki Wholegarment® machines that run on 100% solar power. Crafting knits in a seamless design with minimal manufacturing waste.
Custom supply chain technology and unique digital experience:
• Proprietary technology ensures 100% visibility and gives real-time insights into production processes and total control over quality and impact. Whilst delivering a unique customer experience through The Connected Dot NFC chip.
Experienced founders and investors:
• Sheep Inc. is led by experienced founders and investors with deep e-commerce, technology and consumer experience.
*Based on unaudited management accounts.
Monetisation strategy
Sheep Inc. generates revenue when customers purchase Sheep Inc. products on www.sheepinc.com, and has localised currency websites for international regions.
All our products are manufactured in the EU and operate at an average intake margin of 73%; that's the margin we make on the selling price of products vs the cost to us of producing them with our suppliers.
Building a strong and loyal customer base is central to how we make money and to acquire new customers, we see strong organic sales performance generated through extensive PR coverage. Currently, organic sales generates around 70% of our sales transactions. Additional customer acquisition is achieved through paid digital marketing channels.
Based on data since we began trading in 2019, we currently estimate our LTV:CAC ratio at 4.2x. We calculate the projected customer lifetime spend after 4 years as £560, with an average gross profit per UK customer of £340.
Use of proceeds
Over the next years, Sheep Inc. aims to invest into the business to grow our customer base and expand our offering in the following ways:
Material and manufacturing innovation:
• Continued investment in material innovation and improved manufacturing methods to push product quality and pioneering sustainable credentials.
Product range expansion:
• Further expansion of product range and entering adjacent product categories, including kidswear and homeware.
Acquisition marketing:
• While repeat business is around 35%, we plan to keep investing in acquisition to further grow our customer base and grow our global footprint.
Supply chain technology:
• Expand and innovate our supply chain technology to further improve operational efficiencies and continue to push our offering to help clean up fashion supply chains.
The Connected Dot:
• Continue to develop the Connected Dot digital experience that brings life, depth, and community to the things we wear. And sets the foundation for the move into Web 3.0.
Key Information
Valuation & Options:
The pre-money valuation for this campaign has been calculated on a fully diluted basis, including existing rights to equity that may convert and dilute investors in the future.
In this case, the valuation on the campaign reflects (i) issued shares (ii) options and (iii) an additional incentivisation option scheme.
This additional share option scheme has a maximum award of 6,993,746 options to the company's founders, advisors and employees to incentivise growth. The options are contingent on relevant growth hurdles and fundraising activity and will be adjusted according to those targets.
Please note that the pre-money valuation of the business when excluding this additional option scheme is £2,472,312.87.
Share Classes:
The company currently has three classes of shares, A Ordinary shares, Ordinary shares and Deferred shares. All investors in this round, including Seedrs investors, will be receiving A Ordinary shares.
The rights attached to the share classes are as follows:
A Ordinary shares:
- 1x non-participating preference on liquidation, exit and dividend: A Ordinary shareholders will first receive their initial investment amount before the remaining proceeds are distributed between all shareholders pro rata.
- Voting rights.
Ordinary shares:
- Voting rights and no exit or liquidation preference.
Deferred shares:
- No voting rights.
- On liquidation or exit, the entire share class is redeemable for £1.00.
Material Debt:
The company has the following outstanding loans:
1. £225,000 CBILS loan from Coutts & Co at an interest rate of 3.05% over the Coutts Base Rate per annum. The loan is to be paid in quarterly instalments, with the final repayment date in May 2024. As of 31/01/23 the outstanding balance of this loan was £162,079.76.
2. £150,000 loan from TA Venture Holding at an interest rate of 4% per annum. The loan is to be repaid by June 2023.
3. £25,000 Director's loan from Edzard van der Wyck at an interest rate of 10% per annum. The loan is to be repaid in November 2023. As of 31/01/23 the outstanding balance of this loan was £32,303.36.
The funds raised from this investment round will not be used to repay these loans.
Working Capital Facilities:
The company has the following working capital facilities:
1. Revenue Sharing Agreement with Clear Finance Technology Corp (Clearco) entered into in November 2021. Under the terms of the agreement, the Company and Clearco agreed a repayment schedule to repay a fixed £2,000.00 per week until the amount of £149,472.68 is fully repaid. As of 29 September 2022, the balance of this Revenue Sharing Agreement was £14,014.11.
2. Receivables Purchase Agreement with YL I Limited (“YL”) entered into in February 2022. Under the terms of the agreement, the Company sold the right, title and interest in 17% of all future receivables to YL until the amount of £310,750.00 is fully repaid. As of 29 September 2022, the balance of this Revenue Sharing Agreement was £209,850.76.
3.Revenue Share and Cash Advance Agreement with Movement Trading B.V. (“Movement”) entered into in January 2022. Under the terms of the agreement, the Company sold the right, title and interest in 25% of all future receivables after 31 July 2022 to Movement until the amount of £225,000.00 plus transaction fees are fully repaid. As of 29 September 2022, the balance of this Revenue Sharing Agreement was £247,500.00. On 26 September 2022, the Company and Movement entered into discussions with the intention to restructure this agreement to extend the repayment period.
4. Revenue Share and Cash Advance Agreement with Ed Veenendaal (“E.V.”) entered into in January 2022. Under the terms of the agreement, the Company sold the right, title and interest in 25% of all future receivables after 31 July 2022 to E.V. until the amount of £300,000.00 plus transaction fees are fully repaid. As of 29 September 2022, the balance of this Revenue Sharing Agreement was £330,000.00. On 26 September 2022, the Company and E.V. entered into discussions with the intention to restructure this agreement to extend the repayment period.
Please note, Movement Trading B.V. is wholly owned by Anil Advaney, shareholder and board director of Sheep Inc. Ed Veenendaal is a step-father of Edzard van der Wyck, Co-Founder & CEO of Sheep Inc.
Investor Perks
Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.
Open an account to get access to the team members of Sheep Inc.
Already have an account? Log in
To comply with financial regulations, we can only show full campaign details to registered users.
Only shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy sharesOnly shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy sharesOnly shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy sharesOnly shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy shares