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PUMP Audio

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PUMP Audio is to Dance Music what Beats were to Hip Hop. We make some *seriously* good headphones.

141%
 - 
Funded 6 May 2016
£100,000 target
£142,770 from 154 investors
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Business overview

Location Chelmsford, United Kingdom
Social media
Website www.pump-audio.com
Sectors Entertainment Non-Digital B2C
Company number 09878388
Incorporation date 18 Nov 2015
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Investment summary

Type Equity
Valuation (pre-money) £2.5M
Equity offered 5.36%
Tax relief

SEIS

  • Idea
  • Market
  • Team
  • Updates
  • Investors 154
  • Discussion
  • Documents

Idea

Introduction

PUMP Audio was inspired by our shared love of Dance Music.

We realised that there was a large segment of the headphone market that wasn't being catered for.

As far as we know most of the World's leading headphone manufacturers (with one notable exception) make headphones with a “flat frequency response”, meaning that they reproduce slavishly the sound that’s fed in to them, giving every frequency exactly the same priority.

That can be great for certain genres of music, such as Classical and Rock.

But for other genres such as Dance Music, the music sounds much better when listened to with a 'richer' or 'warmer' sound signature.

Headphones that have a flat frequency response can sound just that: flat.

We've tuned PUMP headphone products specifically to have the "club sound" sound signature that Dance Music lovers love.

It’s incredible for lovers of EDM (Electronic Dance Music), but also sounds amazing with other genres of music as well.

Intended impact

VISION:

Our vision is to be the preferred brand of heaphones globally for lovers of Dance Music.

We believe that by focusing on this segment of the market, we have a competitive advantage over other brands who do not specialise.

Because people who are in to Dance Music tend to be seen as "cool" and are often trendsetters, we expect to generate a halo effect whereby we gain users who listen to music from right across the spectrum.

We feel we have already made strong ripples with repeat purchases from many of our initial customers. We think this is an extremely strong indicator of the brand loyalty that we already have and expect to continue as we scale.

We've also received rave reviews from users - see Amazon for examples.

With the Seedrs financial backing in place we will aggressively expand in to all first world English speaking countries as a first step, recruiting Distributors and Resellers and working with them on local marketing strategies as well as the "global" marketing strategy for the PUMP Audio brand.

We intend to be championed by our retail and distribution partners in a similar way as we have been by our first few thousand users.

We'll do this by working with them ethically towards a common goal and striving to provide the PUMP "wow" factor in everything we do.

PRODUCTS:

We will keep a tight focus on our product mix, giving each new development and new product the love it deserves to maintain the PUMP "wow" factor, rather than launching lots of new mediocre models for the sake of doing something new.

With everything we do in terms of product development, we will try to do it better than the competition, while keeping the focus on our core market of Dance Music lovers.

We will focus on innovation in terms of product development and marketing, but not to the detriment of the core fundamentals of quality, usability, desirability and attention to detail.

We will only develop products that we will *genuinely* use ourselves.

Substantial accomplishments to date

◆ A successful kickstarter campaign which got us started with our first product.

◆ We’ve had a great start with sales of £250,000 and over 8k units sold*.

◆ A focus on extreme quality has meant that our reviews for PUMP In-Ear (our first PUMP product) have been unprecedented in their praise from users, with rave reviews from industry insiders, and consistent 5* reviews from the people that matter: PUMP users. You can see the reviews on the PUMP site, or at Amazon.

◆ Fixed 2 QC issues which could have damaged the brand had we not reacted in the way we did. This was achieved because of the passion we have for the brand.

◆ Up-spec’d our In-Ear packaging to the point we feel it now rivals the very best.

◆ Listened to retailers and distributors and reduced the price point of PUMP In-Ear from £100 to £69.

◆ Received rave reviews, including the first (and ONLY ever at the time of writing) 5 star review from BestEarphonesGuide.co.uk.

◆ Developed 3 new products (In-Ear, Pure & Zeus) and started development on In-Ear Wireless & DJ headphones.

◆ Got first distribution deal for the UK.

*source: unaudited management accounts.

Monetisation strategy

The business model is straightforward in terms of the revenue model.

Of course straightforward does not equal easy, but it's one area where complexity is not an issue:

1) Sales to Distribution partners;
2) Channel sales to Retailers;
3) Direct web sales to the consumer;
4) Sales to independent online resellers;
5) Sales to independent offline resellers.

We will focus in house on:

1) Widening our distribution and retail networks;
2) Looking after our existing distributors and retailers as well as we look after our end users;
3) Finding new channels that generate a positive ROI;
4) Continuing the focus on direct sales via the Internet;
5) Monitoring and managing brand reputation;
6) Relentlessly going after reviews;
7) Aggressively offering on targeted ad-buys (always tracking results);
8) Doing selected trade and consumer shows in target countries.

We will also produce a specialist DJ headphone model which we will aggressively market to DJs.

In very limited cases we may offer top DJs payment to use them while DJing. In most cases, we will offer "top" DJs as many sets as they need for free. For 2nd tier DJs we will offer them sets a heavily subsidised price (cost price) and for all other DJs we will make them available at a competitive price compared with the market leader (Sennheiser HD25) with the hope that this model will turn in to a profit centre in its own right.

This project has already started and a small portion of the Seedrs investment funds will be used to a) complete the development and bring the headphones to market; b) hire the right person to head up marketing, to contact and manage the relationship with DJs.

By getting PUMP Audio headphones on the heads of the Worlds top DJs, we expect a real trickle down effect to Dance Music fans, and to generate a halo effect around the brand.

Use of proceeds

We believe in testing small and then jumping on activities that show a positive ROI, or look as though they could with some tweaking.

With this core philosophy always in mind, we plan to:

1) Bolster our trade sales team, with small sales teams in each country competing against each other.

2) Exhibit at trade and consumer shows in the UK, USA, & other target countries.

3) Try many more advertising channel opportunities (testing small first).

4) Find the right people to achieve a social media presence that matches the quality and personality (and results!) of our other marketing.

5) Offer some financial incentive for authority publications and big artists to endorse our products (only if the deals make financial sense).

6) Develop new models including the DJ headphones described above.

Of course there will be many other calls on capital but the money raised will be spent extremely carefully and strategically with the same care that earned income would be spent.

Investor Perks

IF YOU INVEST £100:
– A one off 35% Discount Code for any PUMP model (can be used once and never expires until used).

IF YOU INVEST £250:
– A 50% Discount Code for any PUMP model (can be used TWICE and never expires until used).

IF YOU INVEST £500:
– 80% Discount. We’ll send you one each of all our current models (In-Ear, Pure & Zeus (when ready)) with an 80% Discount*

IF YOU INVEST £1,000:
– 80% Discount. We’ll send you one each of all our current models (In-Ear, Pure & Zeus (when ready)) with an 80% Discount*
– We’ll join you up to our Founders Club and give you 50% off any new product we ever make.

IF YOU INVEST £5,000:
– 80% Discount. We’ll send you one each of all our current models (In-Ear, Pure & Zeus (when ready)) with an 80% Discount*
– We’ll join you up to our Founders Club and send you every new model we ever make – if possible before it goes on sale to the general public – at a nominal cost**

IF YOU INVEST £10,000:
– 80% Discount. We’ll send you one each of all our current models (In-Ear, Pure & Zeus (when ready)) with an 80% Discount*
– We’ll join you up to our Founders Club and send you every new model we ever make – if possible before it goes on sale to the general public – at a nominal cost**
– Request up to 5 sets of headphones (any model) from us each year to be sent to you or your friends/family at nominal cost**

IF YOU INVEST £100,000:
– 80% Discount. We’ll send you one each of all our current models (In-Ear, Pure & Zeus (when ready)) with an 80% Discount*
– We’ll join you up to our Founders Club and send you every new model we ever make – if possible before it goes on sale to the general public – at a nominal cost**
– Request up to 10 sets of headphones (any model) from us each year to be sent to you or your friends/family at nominal cost**
– Direct access to all key Team Members including Adam Blair. This will include email address and telephone number, Whatsapp, Skype etc.

* there may be a shipping delay, depending on demand
** nominal cost is the lowest possible cost possible while complying with EIS / SEIS guidelines – typically this will be “cost price”

Market

Target market

Our intended target market are music lovers with a passion for Electronic Dance Music (EDM).

However, it appears that PUMP is not limited only to Dance Music fans.

We surveyed our users to ask which genre of music they listen to primarily on their PUMPs.

There were 21 genres of music to choose from and the results from the 259 people who responded varied from Dance / Electronic music (21%) through Rock (13%), Pop (9%) through to Jazz (5%) and Opera (1%).

The results show that even when targeting a specific segment of the headphone market, we can expect to pick up music lovers from right across the musical spectrum along the way, broadening our market potential.

Characteristics of target market

According to the IMS Business Report 2015, the Electronic Dance Music (EDM) business had a value of $6.9 billion globally in 2014, a 12% percent increase from 2013, and Dance Music accounted for 4.6% of all music sales in the USA.

Analysts at Sandler Research (sandlerresearch.org) forecast the Global Headphone market will grow at a compound annual growth rate of 12.70% from 2014-2019.

What we are very confident of is that both the market for Headphones and the market for Dance Music are both huge, and both growing.

Marketing strategy

So far we have reached the market via web sales, consumer shows and targeted magazine advertising.

However real market penetration can only be achieved by having wide distribution in our target countries.

We have been actively searching for a distribution deal in the UK for some time and just agreed a deal with our first UK Distributor who we hope will be able to place us in to one or more of the large UK chains.

We also have a verbal agreement with a Distributor who has channels in the UAE and we are working with them to perfect the product offering for that region.

We will continue to target distribution deals in each of our target countries and will be relentless in this regard.

Each distribution partner will have their own ideas on what marketing we need to do to support their efforts and a large part of the reason for raising equity financing via Seedrs is so that we have the capital available to support them.

Competition strategy

1) Exceptional people in the right positions for their skill set: We will ONLY hire exceptional people who fit in with the the PUMP culture and live the PUMP Standard of Excellence.

2) We will stay true to our values by maintaining our culture and making sure that no bad apples slip in to the barrel. These are not simply notional values, but real values of the people who work at PUMP:

◆ We only make headphones that we LOVE and use ourselves;

◆ We try to always do things differently;
◆ We try to be better than the competition in EVERY way from a customers standpoint;
◆ We continually improve;
◆ We listen to our Friends (customers);
◆ We make sure that EVERY Customer walks away from every contact with us with a *good feeling*.

These values are not formalised yet as we don't wan't them to become a "plaque on the wall", but rather real values that we live by. Every employee lives these values daily and we will let people who don't fit in to the culture go.

3) We will stay true to Dance Music. In our view we have a first mover advantage in this field and intend to capitalise on it by being "the" headphone brand for Dance Music lovers.

4) We will not slash prices. Our pricing strategy will be fair and well considered. Our primary competitive advantages will be quality, brand desirability, specialisation and value. It will not be cheapness.

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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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Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £2,500,000

Pitch type

There are 5 types of investment pitch available on Seedrs.

  • Equity
  • Convertible
  • Fund
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  • Secondary

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

Learn more about pitch type on Seedrs