Personalised Due Diligence by AI and Big Data. Disrupting the Bloomberg, Yahoo Finance, Crunchbase market
- Disrupting the £23bn financial content market
- Clients: BNP Paribas, IEX Group, Seedrs, WiseAlpha, Intellibonds
- Paywall-free content from Fitch, Economist, 1,000s more
- Investment conditional upon Future Fund funding - see Key Info
Learn more about convertible loan campaigns.
This is a top-up round for the Future Fund.
The lead investor in this funding round is a serial entrepreneur with a c. £500m exit.
Data is valuable, especially when structured. We structure financial data, generate analytics, extract insights, and deliver personalised data in 30+ languages.
We’re disrupting the £23 bn market with automation, long-tail coverage, and unrestricted access to our data via API and web at reasonable prices.
In our view, many incumbents have been slow to react to AI, automation, APIs, and Big Data. With this tech, our users can monitor investments, do due diligence, manage knowledge, and in future perform KYC and AML affordably.
Our share price has climbed as we have demonstrated product and revenue traction. The below graph is based on share prices paid by investors in each previous fundraise for the duration of the time the company has been in existence. Therefore, the figures refer to the past and past performance is not an indicator of future results. Investments may be EIS eligible, but tax treatment depends on individual circumstances and is subject to change.
Bytedance started with a similar news recommendation / aggregation service and is now reportedly worth $100bn.
Substantial accomplishments to date
We have built a strong core team that have worked together for over four years:
Our API appears in the first few results on Google for the B2B keywords 'financial news API', and for 'business news API', we appear on the first page.
BNP Paribas and Seedrs say why they work with us:
We've pitched from an ice hole to support the business, too!
We process millions of stories in real-time in 30+ languages from 5000+ publications, with paywall-free and non-public content from 1000+ publications including Economist, Washington Post, Xinhua News, Yonhap News, and more.
Clients have integrated our API publicly and internally:
Our filings service covers filings for public and private companies globally - LSE RNS filings, the US SEC, and global companies houses.
Never again miss filings that could impact your investments or business, like a company’s bankruptcy.
Understand price movements better with News on Charts:
And get more insight with alternative data:
CityFALCON features and insights coming later in 2020 or 2021 are content summarisations, price action explanations, and spam and sentiment scoring.
We officially launched our NLP R&D project (for which we retain the intellectual property) with the University of Malta, partially funded by Malta Enterprise. More info: https://www.bit.ly/3iEs613.
Our 13 Value Investing Meetups educate their 6700 members: https://www.bit.ly/33x2PPW
We’ve received many awards and recognition - https://www.cityfalcon.com/press
We currently focus on 2 key streams of revenue:
1. API licensing fees - Monthly recurring fee or revenue share for licensing our curated content and tech, used internally or white-labelled. BNP Paribas, Seedrs, IEX Group, WiseAlpha, Intellibonds, and several others are already using the API. Plans: https://www.bit.ly/2RE3JV2
2. Premium subscriptions - low-cost plans that offer select non-public and paywall-free content from 1000+ publications (https://www.cityfalcon.com/help/articles/360034...), filings and alternative data, and curated Tweets. Features to launch in 2021 include archival search, offline reading, and limited personal API access. Targets are retail and prosumer users. Plans: https://www.bit.ly/32EUcDS
Future revenue opportunities include fees for licensing of our NLP technology (e.g. content summarisation, sentiment scoring, entity detection) to manage and curate client internal content, historical structured data sets, specialised private company insights, pay-per-view options, and affiliate fees.
Use of proceeds
We remain lean with an annual net burn of circa £630k in FY 2019-2020 (based on unaudited management accounts), even with a team of ~35 employees, data licensing costs and processing and storage costs of data. We still have over £400k in cash (As of Sep 24th), and we are running this top-up round now to apply for the Future Fund before the 30 September deadline.
Over 75% of the funds from this round will be earmarked for salaries and technology costs while the rest will be used for marketing and premium content. See Documents for more information.
Finally, subject to approval, the funds will be matched pound-for-pound by the UK Future Fund. All funds in this round will be convertible debt, not equity. See Seedrs own explanation here: https://help.seedrs.com/en/articles/4067639-fut...
Also, we commit the following to our investors: Monthly updates by the 10th of the month; proper cash flow management; staying lean; breaking even and become self-sustainable; complete transparency.
Certain additional rewards for early or large investments - more at https://www.cityfalcon.com/help/articles/360004...
1 Month Free Trial of Silver:
Coupon voucher code: Seedrs_2020
Valid until 30 November 2020
To use the code:
1) Sign in or register at https://www.cityfalcon.com.
2) Go to https://www.cityfalcon.com/pricing.
3) Click the “Start free trial” button at the bottom of the Silver 1 month plan.
4) You’ll be redirected to the checkout page.
5) Here click on “Apply Coupon”, enter the coupon code Seedrs_2020, and click on the arrow.
6) Proceed to the regular checkout.
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.
Cityfalcon has the following debts outstanding:
1) Bounce Bank Loan - £33,500.
This loan is interest free for 12 months, and was taken out on the 22nd of May 2020. Following this period, interest accrues at 2.5%. The term of the loan is for 6 years, with repayment starting after the first 12 months.
2) Directors loans - £7,990 (loan) and £31,445 (deferred wage accruals).
These loans does not accrue any interest and is repayable on demand.
3) Due to employees - £23,863 (Salary Sacrifice Scheme).
This debt is increasing at a rate of circa £5k per month due to ongoing salary sacrifice into this loan scheme.
This debt accrues 15% interest in the first year (annually compounded), as calculated from April 2020, and 20% in the following years (annually compounded).
The employee debt will be repaid if the company either has positive cash flow, or receives a significant strategic investment which is permitted to repay such debt. Further details on the specifics of this debt can be found here: https://www.cityfalcon.com/blog/the-startup-jou...
Investor funds will not be used for the repayment of any debt listed above.
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.
1. Key Terms
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.
• Valuation Cap: £10,500,000.
• 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.
• 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).
• 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.
2. 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. 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’, 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.
3. 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.
5. Secondary market
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.
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