The PaaS/Adtech platform that unlocks £100Ms of advertising revenue from the brand-consumer relationship
- Total £2.4m investment, including £250k from Sky Ocean Ventures
- Brand partners: Sky Ocean Rescue, Ben & Jerry’s, WWF and Loop
- Android and Apple apps released with 6k consumers on wait list
- Investment conditional upon Future Fund funding - see Key Info
Learn more about convertible loan campaigns.
Advertising is an industry of diminishing returns. Although consumer engagement has incredible value to brands, multi-channel marketing has created a world of misinformation. Consumers are disengaged and confused, with 84% of them no longer trusting traditional advertising. And this sense of mistrust is one of the main barriers to sustainable spending - and that’s despite the fact over two thirds of people want to change their consumption habits to reduce their impact on the environment.
And with major brands now boycotting advertising giants like Facebook over their lack of action over global issues, it’s clear that the industry needs real, innovative change.
Here at Bagboard, we believe in 2 things:
1) The power of consumer spending can create sustainable change on a global scale
2) Technology can drive consumer behaviour changes to achieve sustainability
Bagboard incentivises consumers to promote planet-friendly brands in exchange for a new digital currency to spend back on their products and services.
Substantial accomplishments to date
- Bagboard SME concept founded by Ben Ayres in hometown of Leamington Spa.
- £300k raised.
- Ashleigh Bishop and Charlie Ayres join business as Co-Founders.
- Bagboard concept evolves to larger city-based solution.
- Successful case studies with Ocado, HelloFresh! and Laundrapp.
- £1.3 million raised.
- 2,000 London retailers sign 5-year exclusivity agreements.
- Secured partnership with NGO, Plastic Bank.
- £500k bag machine investment by supply chain with capacity to produce 3m smart bags every month and ability to scale internationally.
- £750k raised.
- Innovate UK award in partnership with Sky Ocean Ventures.
- Sky Ocean Ventures strategic investment partners.
- Commercial partnership with Sky Ocean Rescue for 250k smart bags at launch.
- Press coverage from National Geographic, Sky News and The Evening Standard.
- Shortlisted for reputable awards including D&AD Impact Awards and The Majors.
- Unilever partnership with Ben & Jerry’s smart bag campaign.
- London & Partners, Better Futures and MediaCom agency relationships.
- Android and iOS apps released.
- First results from beta testing program exceeds expectations.
Consumers spend money on products which they find out about through advertising. And brands spend money on advertising to access that consumer spend.
Our commercial value is determined by consumers promoting and spending via our platform. So our first goal is to continue growing our network.
From this, we can start growing our brand network based on their sustainability credentials. Brands can then plan campaigns. We will charge them via an auction-based model similar to Facebook and Google. Brands bid on top of predetermined base rates for two activities that lead up to purchase:
1. Impressions (no. of advert views)
Brands to pay CPT (cost-per-thousand impressions) based on base rate and bids.
2. Engagements (app content views)
Brands to be charged for each engagement.
These will be charged retrospectively at the end of campaigns (base rates and additional auction rates) based on the final data reports for campaigns and consumer activity. More information on this is available upon request.
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 and listed above. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.
Use of proceeds
Working with Sky Ocean Ventures, we’re on a 3-step pathway to become a global business and plan to take the company public through an IPO in 5-7 years, maximising return for investors.
1) Grow our network
We’ll use 250k smart bags from our brand partners, such as Sky Ocean Rescue, Loop, WWF and an additional 10-25 brands to grow a network of 10k consumers by March 2021. We believe each consumer will be able to generate £254 in revenue annually, which will be unlocked from brands bidding in our auction-marketplace.
2) Build an auction-marketplace
We’ll build a data-driven marketplace to ensure brands and consumers can connect through auctions, similar to how Facebook and Google sell advertising.
3) Marketing scale-up through gamified missions
We’ll generate a marketing buzz around the launch around a gamified mission for London to offset one billion plastic bags by Oct 2021 thanks to our partnership with Plastic Bank.
4) Go global
We plan to expand the Bagboard platform globally, starting with the 9 major cities that have the highest advertising spend, consumer spend and distribution capacity, similar to London.
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu....
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart....
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
• Discount: 20%
• Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
• Redemption Premium: An amount equal to 100% of the principal loan amount
• Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount or, if lower, the Valuation Cap share price.
• Maturity Date: 36 months from signing convertible loan agreement.
o The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
- If redeemed, the company will repay the principal together with the Redemption Premium.
- If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Or, if lower, at the Valuation Cap share price.
• Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
o Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
o Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
o Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
Government matched funding
The company intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. Subject to eligibility criteria and the Future Fund's approval, the Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’ to eligible and approved businesses, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is conditional upon receiving matched funding from the Future Fund. Seedrs will not complete the investment and transfer the funds raised until we have confirmation that the Future Fund matched funding application has been approved and that the Future Fund is ready to make the investment. If the application is denied, the campaign will be cancelled and funds will be returned to investors.
Because this campaign is conditional upon the matched funding, you will see that we have reflected the Future Fund investment as part of the round. It is distinguished in pink in the progress bar of the campaign. This is to give investors an indication of the potential total size of the funding round (and potential dilution on conversion), but to also distinguish it from regular investment through the Seedrs platform.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
Conversion to equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
• The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
• The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
• There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
• Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).
EIS Relief - past, current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.
The company currently has 3 classes of shares, A, B and C. All investors in this round, including Seedrs investors, will be receiving A shares.
The rights attached to the share classes are as follows:
A ordinary shares: Each share has full rights in the company with respect to voting, dividends and distributions
B ordinary: Equal rights to A class
C ordinary: Equal rights to dividends and distributions, including on winding up. No rights as regards to voting. Reserved for employees and advisors.
The business has the following outstanding debt:
Netsells (tech provider): £18,000 outstanding. Repayment schedule- £10,000 June and £8,000 in August. Funded by Virgin Start Up loan (£75k).
Sustainable Workspaces (rent): £26,481 outstanding. Repayment schedule £8,827 in August, September and October.Funded by Virgin Start Up loan (£75k).
Nuco (supply chain): £8,200 outstanding. Repayment schedule- ££8,200 in July. Funded by Innovate grant already awarded.
Bounce back loan (Lloyds): £13,000 outstanding. Repayment schedule- £216.67 per month for 60 months starting June 2021.
£18,000 owed to HMRC (PAYE deferral agreed for COVID)
£18,000 owed to Principle Partners (deferral agreed for COVID)
£25,000 overdraft with Lloyds Bank.
Funds raised as part of the this campaign will not be used to repay debt.