At SPOKE, we’ve built a new breed of menswear brand: 100s of sizes, finished to order for a flawless fit
- Annual Gross revenues over £18m (last 12 months)*
- 75% year-on-year growth (last 12 months)*
- Over 200,000 customers to date
- 20% of new customer orders repeat within 30 days, 50% in 6 months
We’re building the world’s most personal menswear brand.
We believe that for most men, fit comes first. And yet, many traditional brands and retailers struggle to deliver. When you spread your stock thin across lots of shops and stockrooms, something has to give - and one of the first things to give is sizing.
Most of us fall between the gaps.
There was a time when all clothes were made to order. It was slow and expensive - but at least they fit. In the age of mass production we traded that fit for choice, trend and novelty - and we never got it back. ‘Ready to wear’ usually isn’t. And today, the rarefied craft of bespoke tailoring doesn’t make much sense, outside the expensive suiting category.
That’s the opportunity.
With a centralised e-commerce model, a digital shopfront and 21st century supply chain, it’s possible to carve out a sweet spot, somewhere between ready to wear and bespoke.
By finishing to order, we can run to more than 400 size options where traditional brands offer 30 or 40. We’ve developed our own proprietary fit-finder tool, helping customers match to their perfect size, in 60 seconds.
We offer a flawless, personalised fit, without the hassle or expense of bespoke.
And today we ship more than 20,000 products a month to the UK, USA, the EU and beyond - growing at 75% year on year*.
Substantial accomplishments to date
• Ben launched SPOKE, cutting the first 300 pairs of chinos at a workshop in East London, and managing the business from his kitchen table
• With promising immediate sales, we raised £600,000 in investment from Forward Partners and angel investors
• Introduced our signature Heroes chino - initially in 150 size options
• ...And moved to a real office
• Printed & distributed our first catalogues to acquire new customers
• Launched our flagship Sharps style - an immediate bestseller
• Cut our first pair of shorts – now selling more than 15,000 in summer 2021
• Expanded our Summer range to include linens and lightweight trousers
• Sent more than 1m catalogues in the UK as our direct mail business took off
• Launched a pilot of our US website – and cracked $100k in our first month of operation*
• Piloted our first pair of jeans selling through 90% of stock in 5 hours
• Launched our first foray into tops – with Pique Polo shirts, cut in 42 sizes
• Acquired our 100,000th customer
• Launched first outdoor campaign on the London Underground
• Aired first TV campaign on SKY
• Launched German and EU websites
• Launched swimwear and shirts for the first time
• Extended our size range to 400 options on flagship Sharps product
• Launched a curated selection of the SPOKE range on John Lewis online
• Secured media-for-equity investment, being one of the first investments for ITV Adventures
• Aired first TV campaign on ITV targeting sports audiences
• Began planning for B Corp certification
• Launched digital ‘Tune Ups’ – on-demand customer fit video calls to help customers fine tune their perfect fit
2022 (planned for the year ahead):
• Open new EU finishing and distribution centre
• Launch Golf range
• Submit B-Corp Certification for approval
• Build on the success of John Lewis with new distribution partnerships in the UK and abroad
• Establish a dedicated US team
*based on unaudited management accounts.
We generate revenue when customers purchase SPOKE products on spoke-london.com, our 3 localised websites for the USA, Germany and the EU, and additionally from SPOKE products listed on johnlewis.com.
We manufacture our products at factories across Europe, the Near East, and Asia - and we finish them to order at our workshop in Yorkshire. We operate at an average intake margin of 71%; that's the margin we make on the selling price of products vs the cost to us of producing them with our suppliers.
We invest in marketing media online and offline, to acquire new customers. 20% of new customer orders repeat within just 30 days, 50% repeat within 6 months. Customer lifetime value (cumulative profit) exceeds £180 – and we continue to see robust purchasing from cohorts acquired 5 years ago, and more.
Our LTV:CAC ratio is over 3x. Our repeat purchase P&L (the revenues from repeat orders less associated costs to service them) absorbs around 80% of our company overheads - and is now profitable* (at an EBITDA level).
*based on unaudited management accounts.
Use of proceeds
We’ve created an extraordinary range, a custom finishing supply chain, a passionate customer base, and a foothold in exciting new markets.
Working from this stable, scalable platform your investment will fuel our growth across 4 key areas:
• Acquisition Marketing - While our repeat business is now cash generating, we plan to keep investing in acquisition ahead of this, to maintain our fast growth momentum, especially in the US.
• USA Dedicated Resource - We plan to hire a dedicated team responsible for the US for the first time - including a GM (London based) to own the P&L.
• Digital Services - We’ll invest in the ongoing process of digitising personal services, expanding on video-based Fit Tune Ups and a next generation Fit Finder.
• Brand Investments - Brand investments are expected to include US & EU localisation and a refresh of TV creative.
The pre-money valuation for Spoke has been calculated on a fully diluted basis, including existing rights to equity that may convert and dilute investors in the future. In this case, the valuation on the campaign reflects (i) issued shares (ii) options (iii) the principal amounts of the Future Fund and ITV Convertible Loans (as detailed below).
Please note that the pre-money valuation of the business when taking into account only issued share capital, is £56M.
The Company currently has 5 classes of shares, A Ordinary, B Ordinary, C Ordinary, D1 Ordinary and D2 Ordinary. Seedrs investors in this round will be receiving B Ordinary shares. Existing shareholders who are following on in this round and certain incoming institutional investors will receive new D3 or D4 Ordinary shares which have preferential rights.
All share classes have full voting and dividend rights. The rights attached to the share classes on a liquidation or exit are as follows, listed in the order of preference:
1. D Ordinary shares (D1, D2, D3 or D4): 1x non-participating preference equal ranking.
2. C Ordinary shares: 1x non-participating preference, ranked behind the D Ordinary shares preference.
3. A Ordinary shares: a participating preference limited to £30,500 to be distributed pro rata among the holders of A Ordinary shares, ranked behind the D and C Ordinary share preference. There are currently 40,666 A Ordinary shares in issue.
4. B Ordinary shares and C Ordinary: no preference.
The company has the following outstanding loans:
1. £2,000,000 revenue based financing facility from Wayflyer, with a Transaction Percentage of 3.8% (5.7% APR). The loan is to be repaid by October 2022. The outstanding balance of the loan as the start of this campaign is £769,850.
2. £1,000,000 revenue based financing facility from Outfund at an interest rate of 4% over the entire term (4.8% APR). The loan is to be repaid by January 2023.
The funds raised from this investment round will not be used to repay these loans.
The company has the following outstanding convertible loans, which will convert to equity on completion of this round. The details of the convertible loans are below:
1. £1,200,000 loan from Future Fund and Individuals, with the following key terms:
- Discount: 20%
- Interest rate: 8%
- Valuation Cap: £36,811,938.90
- Share class: The most senior class of shares being issued in the Qualified Financing Round (a raise of £1.2m or more).
- Maturity date: 03/08/2023
2. £1,200,000 media for equity loan from ITV AdVentures, with the following key terms:
- Discount: 30%
- Interest rate: 5%
- Valuation Cap: £80,000,000
- Share class: The most senior class of shares being issued in the Qualified Financing Round (a raise of £1m or more).
- Maturity date: 31/12/2023
Please note that the principal amounts of these loans have been factored into the pre-money calculation for the campaign. The amount accrued under interest has not been factored in, as this will depend on when exactly the conversion occurs. This will cause some further dilution to the round.
The Company also has an additional £800,000 media for equity loan agreement with ITV AdVentures. Notes under this loan have not yet been issued and therefore have not been factored into the pre-money calculation for the campaign.
Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.
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