Note to investors: Investors via Seedrs are investing on the same share price as the lead investors in the funding round, but into a different share class. Please see more information under "Round Details" below.
Kokoon is on a mission to help the world relax and sleep easier.
In our “always-on” society, worries, stress, over-active minds and disturbances can come between us and getting the rest we need. According to the American Academy of Sleep Medicine 1/3 of us are now reporting troubles with sleep.
Kokoon is a digital platform helping people better use audio to help them relax and switch off. Our app provides personalised, intelligent audio content and coaching developed with sleep scientists based on clinically validated techniques.
We recently launched our first product, Kokoon Relax, a set of ergonomic headphones that work with our app to encourage and protect relaxation and sleep.
The ideal solution for frequent travellers, struggling sleepers, and those in noisy environments. We’ve sold nearly £4.5m in pre-orders and have built a multi-million pipeline of orders from retailers.
Tim Antos, our CEO started Kokoon after dealing with his own sleep problems. As a busy city professional he often found himself awake at night unable to sleep due to stress or a busy mind. After seeking help in a sleep clinic he was introduced to Cognitive Behavioral Therapy and discovered clinically validated techniques that he found very effective at helping him sleep.
Frustrated at how difficult it had been to access this knowledge he sought to make it more accessible and convenient for everyday consumers. Whilst nearly 1/3 of the population have issues with sleep very few can get the help they’d like. Therapist often have huge waiting lists, and most would prefer to avoid addictive medication.
Kokoon is seeking to become the natural way to relax and sleep easier for those hundreds of millions of consumers struggling to switch off. Through better sleep we hope to further the health, happiness, and productivity of the world.
Substantial accomplishments to date
- After more than 4 years of development, last year Kokoon began shipping products to customers across the world.
- We’ve received almost £4.5m in sales online whilst still in “pre-order” showing the incredible demand for our product.
- We’ve had a great customer response with over 200 reviews averaging over 4 stars and returns at less than 2.5% with over ten thousand products now shipped (products have a 14 day returns policy).
- We’re supplying leading retail stores, such as Selfridges, and have a multimillion-pound pipeline of further retail orders.
- We’ve helped many thousands of nights sleep and built fascinating data insights into the effectiveness of different audio.
- We’ve manufacturing scaled in China producing over 6,000 units per month in 2019.
- We’ve been working with businesses as well as consumers and are in discussions with premier insurance companies, airlines, and sleep clinics.
- We recently won an Innovate UK Government Grant to fund the further development of our intelligent audio platform working with Guy’s and St. Thomas’ Europe’s largest Sleep Clinic.
- We’ve launched iOS and Android apps and have a pipeline of features, improvements and new content launching every month.
- We’ve built a portfolio of 5 international patents either granted or pending in addition to proprietary algorithms and unique data insights.
- To date we’ve raised funding from Venture Capital investors, angels and equity crowdfunding.
Kokoon makes money through subscription revenue and high margin products.
Currently revenue comes from products:
- The Relax headphone RRP is £349
- Direct we average 63% margin
- E-Commerce we average 59% margin
- Retail we average 51% margin
We intend for product margins to continually improve as we cost engineer the product and increase order volumes.
In the second half of the year, Kokoon intends to launch a subscription model via the Kokoon app. Subscribers (paying £5.99/mo) will gain full access to premium content, coaching, and features. This follows the well-established business model used by billion-dollar apps such as Calm and Headspace.
Use of proceeds
New funding will be directed into 3 focus areas:
1) Sales Growth – we’re expanding our team to promote and support the global rollout of our product across retail, Amazon and B2B. We’ll be commencing PR and influencer marketing whilst also investing in building cutting edge digital marketing capabilities.
2) Platform capabilities – we’ll be increasing the pace of delivery of our pipeline of new capabilities and content. We’ll be investing in applying our unique data insights to optimise our content, drive engagement and premium subscriptions.
3) Product pipeline – we’ll be accelerating the launch of the in-ear headphone broadening appeal to reach new customers. We’ll also be investing in the continued development of our over-ear headphone; improving performance, UX and margins.
We believe we have a great product and a tremendous market opportunity and are looking forward to scaling to become a world-leading technology brand, positively impacting millions of people’s lives.
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. The company has been granted EIS eligibility previously by HMRC, but the investor perks are pending approval. If HMRC EIS approval is not granted for the perks then the company will be offering discount code alternatives to affected investors opting for the EIS relief.
Lead investors in this round, representing £521,999.92, will receive Series A Preference Shares, while investors through Seedrs will receive Ordinary Shares.
The company has two classes of preference shares (“Preferences Shares” and “Series A Preference Shares”) which enjoy a 1x participating preference. The preference shares have a right to receive 1x their initial investment ahead of ordinary shareholders in the event of a liquidation, distribution of proceeds or exit. Once this preferential return is paid out, the remaining proceeds are distributed amongst all shares on a pro-rata basis.
The preference shares also have anti-dilution protection in the event that shares in the company are issued at a price below £0.249 (share price of the current round is £0.313).