Tech Will Save Us
- Investment sought:
- Discount offered:
Learn more about convertible loan campaigns.
Tech Will Save Us. Building a generation of digital creators.
We believe that the future will be brighter if kids are empowered to build & create with technology, rather than passively consuming with it.
That’s why we’ve created a home learning system that enables kids to learn about the world through technology and play.
Over the last few years, we’ve helped over 1 million kids build & create using technology, through our digital learning platform, physical products and subscription service.
Every Tech Will Save Us employee is an owner of Tech Will Save Us. We now want to give our community the opportunity to further join us by owning part of our business, as we continue to bring learning and creativity to children & parents in a fast-changing world.
This investment round is an extension of the bridge convertible loan note round we carried out last year, with the aim that we will be able to raise our full equity round by October 2020. Last year, we raised £378,278 by way of convertible loan notes on the same terms we are currently offering to investors. We have used that investment to further the same strategy as intended with this investment round and in line with the use of proceeds set out below.
How are we solving this?
We’ve created a play-led, home learning system focused on creativity & technology for 4-12 year olds, which delivers fun, long term learning advantages.
Our learning system is designed to guide kids & parents through childhood, teaching children the STEAM skills most relevant to their age.
There are three core components to our home learning system.
Our digital platform is at the heart of our home learning system. Includes hours of video content, interactive manuals, projects, badges & challenges.
Our range of physical product experiences for ages 4-12 integrates with our digital learning system to bring playing & learning to life. Each age range introduces children to the STEAM skills most relevant to them.
Each of our learning stages will use a subscription model to encourage lifetime learning and value by allowing children to build their skills over a period of time.
In this way, we inspire children and parents to create with, rather than to consumer technology and to build STEAM skills for the future.
Substantial accomplishments to date
• 4 x Parents Choice Awards across various products
• Platinum Oppenheim Award for Arcade Coder
• 2019 Good Housekeeping Best Toy Award for Electro Guitar
• 2 x Winner of Innovation by Design Award, Fast Company
• Design of the Year Nomination, London Design Museum
• Collaborated with the BBC to develop BBC micro:bit. Given to 1mn kids in UK
• Co-created Electro Hero Kit with Disney, Marvel Avengers
• Ran workshops with Princes Trust to teach hard to reach young people in the UK
• Worked with Code Club across 900 Clubs
• Our first coding product, Gamer Kit launched at WIRED 1st Next Gen conference
• Club Make launched with interactive manuals, videos and block-based coding
• Launch event at Westfield in London for Creative Coder, Sew & Glow and Light Racer for 7-10 year olds
• First Music-Tech collection launched - Synth Wave, Electro Guitar, Record and Remix
• New Electro Dough range for 4-6 year olds launched for Christmas
• Family focused educational games console Arcade Coder launched on Amazon during Cyber Week
• Future Inventors Club, our first subscription product, launched after 12 weeks of development & testing
• Total of £7.6M raised
• Raised £5.3M Series A led by Brighteye Ventures
• Innovate UK Grant: £450k
• Nesta grant
• 3 successful Kickstarters raising £250k total
• R&D Tax Credits: £900k
Investors to date
Customers purchase our STEAM experiences on techwillsaveus.com, Amazon and in retail stores. They can buy single products or monthly subscriptions, both with access to digital content.
We use data from our digital platform, Club Make, to tailor our products to our customers. Our product Engagement Rate is 80% showing us that this process works. We receive consistent 5 star reviews across Amazon and Trustpilot.
Our high product Engagement Rate means that our customers repeat purchase, which drives our Customer Lifetime Value. We increase CLV by designing our offering as a journey of products that children can grow with.
We have a fully engaged community that grew by 160% in 2019 vs 2018.
In 2019 we focused on our direct sales growth and reaching customers directly by driving revenue through digital sales channels. Online sales accounted for 55% of Revenue in 2019.
Use of proceeds
We’ve seen strong growth in demand as more children are learning from home during the pandemic. Because of the COVID-19 crisis our digital channels have grown significantly and will likely account for 80% of our total sales this year.
Our crowdfunding campaign will enable us to meet this demand while we prepare to raise our next round of investment in the near future.
Your investment will be used as below:
Due to the overwhelming interest we’ve seen in our campaign, we have extended our campaign target. By overachieving our target, we can accelerate our plans as a business and help even more children build STEAM skills for the future.
By investing now, you will receive discounted equity in our business. You will also receive:
- Quarterly investor updates
- Exclusive Tech Will Save Us discounts, based on the model below:
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 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.
This investment round is being raised by way of a convertible loan that has been designed to be compatible with the Government's Future Fund scheme. Please see the Key Information tab for more information.
Existing Debt and Convertible Loans
Please see the document titled "Existing Debt and Convertible Loans" attached in the "Documents" tab for a summary of the Company's existing convertible loans and debt.
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu...
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
Convertible Loan Key Terms
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart....
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
- Discount: 20%
- Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
- Redemption Premium: An amount equal to 100% of the principal loan amount
- Valuation Cap: £15,818,180
- Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount or, if lower, the Valuation Cap share price.
- Maturity Date: 36 months from signing convertible loan agreement.
The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
If redeemed, the company will repay the principal together with the Redemption Premium.
If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Or, if lower, at the Valuation Cap share price
- Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
1) Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
2) Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
3) Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
Government Matched Funding
The company intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. The Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is not conditional upon receiving matched funding from the Future Fund. Seedrs will complete the investment and transfer the funds raised even if the application for Future Fund investment is rejected. We will ensure an application is made to the Future Fund for matched funding and will not complete until we know the outcome of the application. But if the application is rejected, the company will still be permitted to complete the investment round.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
Conversion to Equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings.
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
- The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
- The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
- There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
- Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).
EIS Relief - past current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.