Start-ups that manage to successfully "use the crowd to learn something" could be the next huge market opportunity. - Larry Page, June 2016.
CityFALCON is redefining how financial news is sourced, curated, distributed and consumed.
CityFALCON Score rates financial content - news, tweets, investment research and authors. Our proprietary algorithm considers several factors including the content of the story, rating of the author, performance on social media, and crowd curation. If there are 200K stories for a watchlist, CityFALCON Score can give you the top 30 relevant stories.
Moreover, our technology creates a different financial news feed for every person. Imagine a financial news feed just like your feed on Facebook, Linkedin and Twitter.
Here is a short video on how CityFALCON Score works:
While our primary focus is supporting investors and traders, we also help retail investors by 1) democratising access to financial news and data, and 2) helping average people who'd like to start investing in the stock markets with content, events and solutions (http://www.cityfalcon.com/new).
This is just a start, and the future is exciting with chat bots and machine learning.
We believe that the traditional financial news feeds and systems are expensive, based on slower technologies, have a steep learning curve, rely on manual curation in contact centres, and cover limited social media activity. Moreover, we find that there is a lot of focus on short term algo trading, and there are a plethora of research companies providing long term reports, but not many solutions are suited for long term investors. E.g. to our knowledge none of the services can today give you top stories for your portfolio over the last day, week or month.
Our Key differentiation are: 1) Curation - How we curate news using crowd-curation and CityFALCON score; 2) Audience – Our focus also on underserved segments in the market; 3) Comprehensive – We provide tweets, news publications and crowd-sourced research in one feed; 4) Relevance and personalisation - CityFALCON news feed allows users to access relevant and personalised news rather than just a chronological news feed provided by other players in the market. With our product, we want users to spend less time scrolling through and reading news, and 5) Real-time - Everything happens in milliseconds to seconds.
We run London Value Investing Club (http://www.meetup.com/london-investing/) with more than 800 members and at least 2 events per month; 30-85 people show up at an event. These traders and investors not only provide us feedback on our products but also allow us to understand their pain points and needs. We are looking to roll this concept out to other major cities in the UK. We'd love to see you at one of our events.
Our goal is to make our fundraising campaign one of the most transparent crowdfunding campaigns ever. We've published a series of articles including on risks, valuation and our commitment here:
Moreover, here are 11 reasons why some investors did NOT invest in our company:
We've received feedback from more than 100 retails investors, and also businesses, and here are the top requests - 1) Mobile app, 2) API for individual use, 3) Fundamental data and charts, 4) More data and insights for businesses.
Substantial accomplishments to date
We've built scalable technology that processes millions of stories in real-time every month, a web platform for B2C, and an enterprise level API for B2B and B2B2C. It took us up to 10 developers and more than 2 years to get here.
B2B and B2B2C - We've signed (proof of concept) agreements with 8 businesses - wealth managers, brokers, FinTech start-ups.
B2C - 6K monthly uniques, 3.5K registered users, 300+ monthly active users who use us for up to 250 times a month, and 26% email open rate.
We graduated from Microsoft Accelerator in 2015, and receive continuing support from Microsoft on technology, marketing, and business and investment leads.
We have received several awards and recognition - second at Twitter’s global start-up competition, won ‘The Next Big Idea in FinTech’ from Ontario, final 10 at the Standard Bank Challenge, and final 10 in EMEA at the UBS Competition.
Our primary source of revenue is licensing fees from businesses to access our API.
Estimates of the size of the market go up to £15bn. Our enterprise products are listed here (http://www.cityfalcon.com/enterprise).
Our B2C products are free for end users, and we monetise in direct ways - affiliate fees and sponsorships. We have affiliate deals with major brokers and companies in the UK - IG, Hargreaves Landsdown, Seedrs, Syndicate Room, City Index, eToro, and Plus500. Affiliate deals vary from one-time CPA to up to 25% revenue share.
With our product, user base and relationships, we'll explore building related products and services, and generate incremental revenue opportunities - premium subscription for B2C, Spotify of news, and distribution of premium content. Moreover, we have a lot of potentially valuable information that we can look to monetise later e.g. a) What financial assets are popular by user profile (long term investor, short term trader), and by country, and b) Which authors are influential and popular at a particular publication.
In addition, we believe that our platform could be an acquisition target for several players who are focused on curation of news and data in the financial and media industries.
Use of proceeds
We are a 'lean' FinTech start-up and will continue to remain lean. Our primary objective is to break even and become self-sustainable.
We need a minimum of £150K but ideally look to raise up to £540K in this round which would provide us with a runway of 18 months @ £30K monthly burn rate. We expect revenue and R&D tax credits to provide some margin of safety.
We'll use the money raised to:
- Expand the team - senior management, developers, data scientist(s)
- Continue building the product – enterprise features, mobile apps, and add more financial assets, and sector and macro news
- Increase our marketing and sales efforts
We've received enough Azure credits from Microsoft to have hosting free for the next 2 years. This saves us c. £7K per month.
Our basis of valuation is explained in detail here:
Also, we commit monthly updates by the 10th of next month and more to our investors. Read here:
The company has an outstanding loan of £7,990 to the directors, however none of the proceeds of investment are intended to be used to repay this. In fact, the same director is also investing £5K in this round.
We cater to the needs of fundamental investors and traders who consume news for their investing and trading strategies, and to monitor their or their clients' portfolio or watchlist.
B2B, B2B2C - wealth managers, asset managers, brokerages, investment advisors, robo-advisors, consulting, accounting, and research firms, corporate treasuries, and FinTech companies especially in the InvesTech space.
Here is how our API can be embedded in a trading platform.
B2C - Retail traders and investors, finance students and newbies who'd like to get started in the stock markets.
Characteristics of target market
In finance, data is money, and quality curated data is a lot of money. Analysts put the size of the financial information and news market at £17bn per annum, and the big players make billions of pounds in revenue each year.
While Bloomberg and Reuters terminals and solutions dominate the market, they only address a small part of the market that can afford to pay high fees. Several potential clients including wealth managers, smaller brokers, and retail audiences struggle to get access to quality data and services. Several of these unserved segments rely on Google Finance, Yahoo Finance, etc which are good services but no where close to what these audiences require.
There are some challenges that we face in getting our potential clients adopt our or any other new service- 1) Most finance professionals are busy and don't have the time and patience to try out new services, 2) Some of the organisations use old technologies that may struggle to easily integrate our news feeds.
B2C Online activities
- Manually on-board influential people who LOVE and promote our products.
- Create quality original content on CityFALCON Blog, and share on finance sites including Master Investor, Seeking Alpha, and Finance Magnates.
- Reach out to proprietary investors and traders, university students and research organisations.
- Twitter automation and bots to tweet out dynamic information every few minutes.
- SEO, social media marketing, growth hacking on Quora, Reddit and trader forums, etc. E.g. search for 'financial news api', and usually you'll see CityFALCON mentions on the first page of Google.
B2C Offline activities
- We launched London Value Investing Club in August 2015, and currently, we have 800+ members and about 30-80 people show up at an event. The meet-ups are currently sponsored by Pelican Exchange and we've worked with several other companies including IG, Seedrs, and Interactive Investor.
- Relevant conferences and events.
B2B, B2B2C Strategy
- B2C is our best B2B strategy. We allow company executives to try our product for free on our website. We have a product that sells itself and most of our business leads have come through this channel.
- We partner with other FinTech companies who already have existing relationships with potential clients. These also include other data aggregators, and business intelligence and knowledge management platforms. For example, Utilidex have used our data feeds and merged it with price and other information, and signed a major UK company; we would share revenue on such deals. We are currently discussions with several companies who could help us reach the target market much faster.
- Relevant conferences and events.
Competition would be a more valid concern if we were operating within the general consumer space, where we would face serious competition from the tech giants such as Google, Apple, Facebook, etc. However, in financial services, we've found that our competition is slow-moving, and hesitant to implement disruptive technology. Rather than worrying about these companies, we focus on staying ahead of the new, nimble start-ups; and keeping up to date with the latest changes in technological trends, especially artificial intelligence. We also operate as a lean start-up, maintaining a much more strict cost-management strategy which means that we only need a fraction of the resources that the big giants have.
Our strengths are innovation, low costs and quality data. Also, where possible, we partner with other FinTech start-ups to compete and provide quality solutions to our clients. This is why several business have chosen us as their supplier of financial news compared to other services in the market.
Our competition includes:
- Traditional subscription services - they are expensive, unintuitive, focus on rich traders and investors, and have limited social media and crowd intelligence integration.
- Search engines - they provide financial news for free but there can be a 30 minutes delay for breaking news, and feeds are not based on users’ trading horizon and don't cover financial tweets
- Social media analytics companies - they focus mainly on institutional investors, only on social media activity and ignore other sources of information, and target mainly day / short term traders.
- Social networks- They suffer from a lot of noise and are generally not catered to the needs of a financial audience.
FinTech startups are aggressively entering the InvesTech space, but the market is big, and we believe that several players can survive.