Football INDEX

Football INDEX is the world's first football stockmarket where you can trade top players with real money

EIS

Location: London, United Kingdom

www.footballindex.co.uk

Categories: Entertainment Digital Mixed B2B/B2C

Investment sought:: £800,009

Equity offered:: 15.10%

Funded 10 May 2016

Investment amount:: £1,156,327

Valuation (pre-money):: £4,497,268

Idea

Introduction

Our mission is to establish a Tradable Market in football by issuing Virtual Shares in the World’s Top Players. As a result we will share in £17billion that will be bet on Football in the UK this year* .

The Company has built a revolutionary gambling platform that replicates the trading activity of a “stockmarket” and may be applied to sectors such as sport and celebrity.

Football INDEX addresses a huge impassioned audience with a unique and compelling proposition: BUY, SELL, BET, indeed “invest” real money in the world’s Top 200 football players. Build value in your portfolio (capital appreciation), earn dividends (ROI), and ultimately sell at a profit.

We believe the Product fills a vacant space between two massive markets with huge followings - football sports betting & fantasy football – but has advantages over both in certain respects.

* Projections based on UK Gambling Commission figures.

Intended impact

Our vision for the product is a trader or football fan in a Costa Coffee queue with 30 seconds to spare, which is not long enough to get lost in his facebook news feed, but is long enough to ‘check his stocks’.

Every piece of football news in the media is a trigger to think about your Football INDEX portfolio. Who should you buy? Is it the right time to sell? Who is going to offer long term returns? We're empowering football fans to use their knowledge and passion of the game to trade Virtual Shares in football, just as many financially savvy individuals currently do with a stocks apps.

Substantial accomplishments to date

Over £700k has been invested to date to build and establish our revolutionary software platform which has been tested and licensed as a regulated product by the UK Gambling Commission. In addition our wholly owned Jersey subsidiary has been issued with both UK & Jersey gambling Operator Licenses.

Football INDEX has now been live for 5 months and attracted over 35,000 Registered Users and over 13,000 Paying Football Traders that have deposited in excess of £850,00 into the platform during that period. These results are ahead of projections in all respects and we feel they provide a strong proof of concept for the platform.

On 10th March we signed a draft agreement to provide Football INDEX to Sun Lotto a major licensed distributor of regulated products in mainland China.

Monetisation strategy

We believe our business model is significantly different from anything that has preceded it in the gambling sector. Please request a dedicated document that goes into this aspect of our business in more detail.

In summary:
Every Virtual Share in existence is a fixed odds bet that has been issued by us at whatever the purchase price was at the time of issue. We receive all that issue price as gross profit.

From Gross Profit we deduct dividend payouts that will be due on that Share over time - an estimated 20%.

15% Gambling Tax is due only on 'closed bets' (once a customer has sold his share and no longer holds it as an open bet) and where the customer 'loses' (ie sells his 'bet' for less than he bought it for). We estimate that no more than 5% gambling tax will be due in any month on Shares issued, as shares are generally held for a significant period and it's been very rare to date that they have been sold for less than the purchase price.

It's important to point out that some shares purchased by Users have been 'pre-issued' and are currently held by another player, consequently the selling player receives the sale price and we receive only 2% trading commission. We only 'issue a new share' in response to 'excess demand' for that footballer (rather than excess supply).

During the period of our Test Campaign 71% of Shares purchased were issued directly by us and were not offered for sale by Users in the market.

Gross Gambling Yield (profit) on the £17bn bet on football this year is likely to be less than 4.5%. Our margin is demonstrably considerably higher than that figure.

Our goal is to build a football stock market, with a market cap of £100m.

Use of proceeds

Use of funds:

- 20% of funds develop technology and infrastructure.

- 80% marketing budget to scale the platform.

- There is an outstanding loan to the company by the CEO of £78,724. This sum is being repaid to him in lieu of salary. The funds raised may be used in respect of this.

**There is an outstanding loan of £120,000 held by BGG Holdings. The funds raised will not be paid to service this loan.

Market

Target market

UK based football fans who are 18+ are our primary target audience. Football transcends traditional demographics. For instance in our test campaign we demonstrated significant value in targeting "City Traders" via the daily newspaper City AM. These customers understood and engaged with the product quickly and spent over £1,000 per head in many cases.

The Product fills a vacant space between two massive markets with huge followings - football sports betting & fantasy football – but has advantages over both in many respects.

Football betting is the largest sports book activity with a turnover of £17.7billion for 2014/15. While Fantasy Football sees more than 3 million customers playing with the most popular provider each week.

Global fan following of the Premier League is 1.46 billion – or 70 per cent of the world’s estimated 2.08 billion football fans.

Characteristics of target market

Football betting is the largest sportsbook activity. UK Gambling Commission data projects a remote football betting turnover of a massive £17.7billion for 2014/15 with a Gross Gambling Yield of £789 million, and all indications are this will grow.

However sports betting can be brutal, focused heavily on quick ‘event’ outcomes, You may have a good idea who will win the match at the weekend, but so does your bookie, so it’s hard to find value and it can be an expensive form of entertainment.

Fantasy Football is a mainstay of UK online recreation. The Premier League claim in excess of 3 million players engaged each week, and every significant publisher has it’s own version.

However the game is a tired format with an unglamorous image, that requires an unflagging weekly commitment, with little reward beyond ‘bragging rights’. Fantasy Football also requires a reset each football season.

We have identified a gap that lies between these two well established and mature markets.

Marketing strategy

Football fans are passionate and excitable, they want to appear knowledgeable and crave information that will give them an edge. It is an established daily anchor for these fans to search for news of their favourite teams and players which provides a wealth of digital marketing opportunities.

Our test campaign has proven that we can successfully reach and engage these Football Fans and City Traders. The product will continue to be promoted through our established media channels including our partnership with the Daily Mirror, the Income Access affiliate network, Yahoo, and City AM. Paid social promotion via Facebook and Twitter are established and profitable acquisition channels for the gambling sector and offer a great way to promote advertorial and video. During our test campaign our video was promoted by Mirror Football on Facebook and subsequent sharing generated 274,000 views in under 24 hours confirming the appetite for the product and size of audience.

We will trial low cost TV as customers have demonstrated a high propensity to convert once they have viewed our video on Facebook and via Yahoo video seeding.

The launch of our premium native apps in March/April 2016 will further extend our reach into this market via the App Store, and improve both customer engagement and retention.

Competition strategy

Our revolutionary platform is at the current time unique in the market place with no direct competitors.

Indirectly we compete with football sports betting and fantasy football for share of wallet.

Our “trading” platform provides a “soft” alternative to Sportsbook that is far less dangerous, with entertainment value extended over a much longer period. To Fantasy Football fans Football INDEX offers extended engagement 24 hours a day, 365 days a year, with 'more skin in the game'.

Any competitor wishing to compete directly with us would need to evaluate our product, present it to their board for approval, allocate development resource and find a vacant spot in development roadmap, build and test the product, and get tested and licensed by the UK Gambling Commission and also have Gambling Operators License in place. All of the above is likely to take a significant period of time, and afford us significant first mover advantage.

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Investing carries risks, including loss of capital and illiquidity. Please read our Risk Warning before investing.

Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

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