Clear Books plc is valued at just over £18m pre-money (i.e. prior to the launch of our Cloud Funding share offer). No method of valuation is perfect but as a fast growing startup here is the rationale behind ours.
Please note that the usual risk warnings apply i.e. read our Share Information Document before making a decision to invest.
A unique opportunity
This is a rare opportunity to invest in an early stage tech startup. We explored taking venture capital and considered continuing to grow organically. A VC may have offered more money in return for a lower valuation, but we wanted to open the doors to our customers to become shareholders instead.
The cloud opportunity
We have a product that sits on the cusp of the technological shift from desktop to the cloud. If you believe that the cloud is becoming the gold standard in business software, and the fact that you use our cloud accounting software suggests you do, then this is an opportunity to leverage that.
Simple business model
We collect monthly subscriptions in advance which provides great cash flow visibility.
Our 5,000 customers pay approximately £12 per month each which generates £60,000 revenue per month. Providing we don’t lose or gain any customers next month then we would also generate £60,000.
By way of example, if we grew the business to 50,000 customers then we would expect to generate £600,000 per month. If, in addition, we increased the revenue per customer from £12 to £18 per month by cross selling other business software then we would expect to generate £960,000 per month.
It’s a predictable business model where the customer growth and cross sell provide the opportunity to grow the top line.
Progress
We are now a plc and have received advanced approval for EIS relief, we continue to grow and achieved record monthly revenue last month of £64k, the company has reduced shareholder loans from £200k down to £30k over the last twelve months and has gone from being loss making to break even in the financial year to date, the team has expanded, the platform has advanced with a number of integrated services launched and we have a clear ‘go to market’ strategy to target the accountant channel as the source of future growth.
Shareholder confidence
Existing shareholders have endorsed the company and put in £86,000 in this round on this valuation.
Competitors
The Sage Group plc is valued at £3.8bn; Intuit at US $19.7bn; and Xero plc at NZ $2.2bn.
Our product competes with the above competitors and our challenge now is to scale our market share.
Growth
Our last reported revenue to March 2013 was £473,565 (p.28 of the Share Information Document). As outlined below our revenue now exceeds £60k per month. Therefore you would expect a minimum of 12*£60k = £720k revenue over the next twelve months.
Enterprise Investment Scheme
This is an attractive tax relief scheme for those eligible and you can read more about it here.
By way of example, and subject to your personal tax status, if you invest £10k then the tax man will knock off 30% from your end of year tax bill. So the effective cost of investment is £7k. Another benefit of the EIS scheme is that there is no capital gains tax on the sale of your shares (subject to certain criteria such as holding them for at least three years).
Great culture
We don’t have a short term objective to exit or sell the business. Our goal is to create a leading UK cloud business software provider for the long term. Our team and company culture align with this goal.
Are you supporting us?
Do you believe in the product, the brand and the team at Clear Books? Do you believe Clear Books has the potential to continue growing? We will continue to do our best to tell you our story but as with all investment it is the investor who takes a calculated risk in the end.
So what do you say? are you in?
Thanks Kind Sole 🙂 Updated.