- Investment sought:
- Equity offered:
We formed a strategic partnership with a major partner in 2016 which saw them become shareholders of Shavekit and form a closer partnership. The success of Shavekit was dependent on us being able to source quality products and work with a manufacturer with scale and IP/technology. By forming this partnership we were able to not just remove this element of risk from our business, but open up deeper cooperation and potential options for the future. And from their perspective, an exciting new area of digital D2C growth for our strategic partners. This immediately had a positive impact on our P&L; with better terms, closer cooperation on product, as well as other strategic support. Which allowed us to invest in things like customer acquisition, technology, platform and product development. Without this partnership Shavekit would not be in the strong position we find ourselves in today, as almost all other razor subscription startups, including Dollar Shave Club, for example, have struggled to become sustainable. without finding a similar strategic partner or acquirer and many have disappeared or closed down while we continue to improve our metrics over time.
The terms of the deal, for which we are today opening up the pre-emption rights, was negotiated over a period of about a year between 2015 and 2016. The equity/shares from that strategic investment were not allocated all at once in 2015, they have been distributed quarterly, from Q2 2016 until Q4 2019. So although the deal was agreed in 2016, the terms meant that the investment actually flowed over a period of 5 years. Which created an unusual situation; where we had further rounds of investment, at a higher valuation, open and complete, before the strategic investment's shares had been completely issued and that 2015 round closed. The valuation you see today is therefore not today's valuation, but a pre-emption round for 2015's valuation, that 2015 valuation was not based on just what capital we received in exchange for equity. The strategic investment adds far more value than just money, in this tough industry, in our view, a strategic partner was and is, crucial to success. The investment round that this pre-emption relates to was agreed in 2015/2016 but took 5 years to allocate the shares, at the 2015 valuation. You are now being offered the pre-emption rights for on the same basis as the strategic investor, as is your right and for the same share price that they had in 2015.
Our lean approach has paid off and we believe we ’re in a good position to achieve our goal. The company has no debt, good metrics and a great team. 2019 saw us move towards hitting breakeven per month and moving towards profitability in our 7th year of trading remains our focus.
This is a pre-emption campaign open only to existing investors. As such, limited information is being provided at this time.