- Investment sought:
- Equity offered:
As the CTO of an e-commerce agency for 10+ years, our founder witnessed the problems with innovating and scaling bespoke e-commerce websites, before retailers moved to powerful platforms like Magento and Demandware.
In today's mobile first world, we believe that many retailers are having similar growing pains with bespoke native apps. Poq was created to provide a commerce platform for native apps – allowing retailers to innovate on mobile in a scalable way.
Poq is a commerce platform for native retail apps. The SaaS platform enables over 30 retailers, including House of Fraser, Missguided, Steven Alan, Radley and Blue Inc, to deliver best-in-class mobile apps across Android and iOS – updated quarterly and integrated with any major e-commerce platform. We offer large retailers a reliable and scalable way to deploy and maintain native apps.
Our team of 11 experienced professionals is mostly focussed on technology development and have a wide e-commerce background.
– Here is an example of an app powered by our platform: Orla Kiely on The App Store:
We believe in empowering retailers to deliver world class shopping experiences to mobile consumers; removing the technical barriers of traditional app development and reliance on the responsiveness of agencies.
The 3 main areas where we believe native apps add value:
1. Add incremental mobile revenue through a more responsive user experience and native payments
2. Improve brand engagement and loyalty based on mobile user data
3. Connect online & in-store shopping through location aware technologies like beacons
Using the Poq platform, retailers have full creative control of their apps, whilst inventory and orders are seamlessly integrated with any e-commerce platform. Our (SaaS) platform has been live since March 2012 and is being continuously developed, with new code rolled out every week and major releases delivered every quarter.
App content is managed centrally within Poq's admin system and our technology adapts the consumer experience to reflect the device and operating system the app is being used on. The platform is API driven and ready for market developments. All the while, a retailer's app portfolio is centrally managed with inventory and orders synced with any existing e-commerce infrastructure.
Substantial accomplishments to date
Note: This round is part of a larger investment round of £500k. We have closed £200k outside of Seedrs before the campaign started from Zerimar Ventures (US VC firm in the video) and Meyerbergman, a London based private equity firm.
We believe that Poq is now the market leader in the UK for native retail apps. We have been been revenue generating for well over a year and are working with more than 30 of the biggest retailers in the UK, including: House of Fraser, Radley, Orla Kiely and Missguided.
We are also part of Seedcamp, one of Europe's best tech accelerators, and are backed by one of London's top venture capital investors in fashion and retail, Venrex (who have backed a number of companies including JustEat in their Series A).
Our main KPI for the platform is increased conversion rates on mobile. The results from our latest platform report, which were picked up by the trade press, illustrate the strength of the apps in driving higher conversion rates. Average smartphone conversion rate in June was 2.2%, only slightly lower than average desktop and more than 4x responsive web.
Apps powered by the Poq app commerce platform have been nominated for and won several awards, including the Retail Week Etail and UK Mobile Design Awards.
Our business model is software as a service (SaaS). We are charging a subscription fee of 5-6 figures annually to large retailers, often in combination with a small transaction fee. This transaction fee serves as a tool to decrease fixed monthly costs for our clients, but also increases our commitment to our clients' success and the benefit we get from the long term success of the apps.
Pure monthly recurring revenue stood at more than £25,000 at the end of August 2014. Monthly recurring revenue growth (month-on-month) has been approximately 15% in 2014.*
In addition to charging a recurring fee, we are offering design, a managed launch service and app consultancy for larger retailers, where we are offering advice based on our wide expertise from launching more than two dozen apps.
*Source: unaudited management accounts
Use of proceeds
We plan to use the proceeds to gear up to raise a Series A investment early next year. The main areas of investment are:
- Rebrand to underline our SaaS platform proposition: The 'Studio' in our name is misleading some clients, technology partners, as well as investors.
- After the rebrand we want to spend more on marketing: At this point about 15% of our leads are inbound, the rest comes from our direct sales team. In addition, we expect better marketing and branding to help us to decrease the sales cycle by driving the right clients to our website.
- Launch and collect data from major clients: When we launch a new client we often get interest from both trade press and potential new clients. In addition, we are collecting anonymous usage data from all apps on the Poq platform, this means we are getting great insights to what consumers are actually interested in.
- Expand customer base amongst enterprise retailers
The SaaS platform currently enables over 30 retailers, including House of Fraser, Missguided, Steven Alan, Radley and Blue Inc, to deliver best in class mobile apps across Android and iOS. We sell our solutions domestically and internationally through both direct and indirect channels.
We offer large retailers a reliable and scalable way to deploy and maintain native apps. We have partnerships with Magento and Demandware focusing our sales efforts on their enterprise retail clients with more than £1m online revenue. This can be either pure play online retailers or multi-channel retailers with own stores.
At the moment we believe that the best prospects are retailers amongst the top 500 retail sites in the UK, whose websites are on commonly used e-commerce platforms, like Magento or Demandware. Some examples of the type of retailers we are hoping to work with in the future are the likes of Kurt Geiger or Fred Perry.
We generally approach the E-commerce Director, as mobile traditionally falls under their responsibility. However, an app can offer a lot of value when used as the glue between online and in-store shopping, in this case we need to engage the wider team in the client’s organisation, such as the Retail Director.
In the next 8 months our main focus will be largely on retailers in the UK, but still going to key events organised by our partners in Europe and the US. We already have two key beachhead clients: Steven Alan in the US and Scarosso in Germany.
Characteristics of target market
We see our total addressable market at the centre of 3 large and growing markets.
Firstly, digital commerce in the form of e-commerce, consumers buying products remotely from a digital device. E-commerce is about $1.5-trillion worldwide. Right now m-commerce can be seen as a subset of e-commerce. Global mobile transactions have averaged 42% annual growth in volume between 2011 - 2014. Mobile payments are predicted to reach $1 trillion by 2017.
Secondly, the market for SaaS, cloud based solutions for large retailers. Gartner predicts the global spend by enterprise clients on SaaS products to reach $22bn by 2015.
Thirdly, mobile in an omni-channel world. Google states that already 82% of smartphone users are using their mobile when buying products in a store. We believe that soon mobile will be not just e-commerce, but will touch 100% of retail. Apple and Samsung are opening fingerprint recognition for payments, which will finally open retail to mobile payments.
Our strategy to grow our revenue base is based on three pillars.
Firstly, we are aiming to retain and grow our current customer base, by innovating on our product offering. We expect that developing features that help to connect online and in-store shopping for our clients will allow us to touch a larger part of their business. Thus, adding more value, making our solution more important for their long term success and reaping larger benefit ourselves, as well.
Secondly, growing our customer base in the UK. Currently, most of our prospects come from outbound direct sales and about 15% from inbound sales through channel partnerships. To grow the percentage of inbound marketing leads, we are using a mix of content marketing and joint PR with our portfolio of enterprise clients. Part of the investment is planned to go into investing in our direct sales channels and marketing capacity. In addition, we're building an ecosystem of app and e-commerce technology providers. These partners are providing leads through exclusive partnerships, as well as increasing the value of our solution through technology collaboration. Our strongest channel are e-commerce platforms where we have pre-set integrations, like Magento and Demandware.
Thirdly, we plan to grow our presence in new markets, specifically the US and Europe. We already have key customers in both territories and we expect that existing and new partnerships will allow us to grow further in those places.
We believe that we are the leading commerce platform for native retail apps in the UK.
One of our key competitive advantages stems from running all clients on the same technology platform, on one version of the code. In this way we are able to scale good performance and apply best practices from our clients across the platform based on our knowledge database. Every company on the platform could potentially gain from innovations driven forward by other clients. We believe that this results in a strong network effect over time, as more clients add ever more insight into consumer shopping behaviour.
Generally competition can be split up in the following sources:
- In-house development efforts. This is rather rare and we feel only works well for a handful of multinational retailers like Amazon and Ebay. Especially looking at a cross platform offering of iPhone, iPad and Android, we believe that this becomes too resource intensive for the vast majority of retailers.
- Traditional web agencies, who aim to build mobile apps bespoke. Only a few agencies can warrant to hire a large team of app developers, as it’s not their core business. Cross platform development can be very expensive for the client to launch and maintain. Thus we believe that we will always be able to beat agencies on price and long term innovation.
- App developers: we compete mainly with reliability and scalability of our solutions, our speed of deployment and cross-channel development. This means we can launch a new clients in weeks rather than months. In addition, we believe that our model is cheaper on scale, because we only deploy one code-base for all our clients.
Finally, we are regularly approached by app technology providers for exclusive partnerships, for example for offering augmented reality or ibeacon to retailers on the Poq platform.
We strongly believe that we are already seen as the market leader in the industry. We feel that the Poq platform is unique in being the only fully cloud based platform for native retail apps, built for large retailers.