- Investment sought:
- Equity offered:
The Clubhouse is one of London’s leading business members club and meeting space. We provide a network of innovative, design led flexible meeting and workspaces in central London created around the needs of both fast growing SMEs and large corporates who are looking for a smarter, more flexible alternative to a London office or a better way to do business.
Are cafés, coffee shops and hotel lobbies really the right place to be meeting important clients? Perhaps you have an office outside London, work from home or just need alternative meeting space in the heart of town?
This was the problem faced by the Founder & CEO, Adam Blaskey who for years met his clients, contacts, partners and investors in hotel lobbies and coffee shops around central London.
At The Clubhouse our aim is simple: To make our members and their businesses more successful by giving them everything they need from a central London office - and more - but without the overheads typically associated with a premium office location.
Substantial accomplishments to date
Having launched in October 2012, The Clubhouse currently operates from three locations: The Clubhouse Mayfair at 50 Grosvenor Hill, Mayfair, The Clubhouse St. James's at 8 St James's Square and The Clubhouse Bank at 1 Angel court.
Home to some 374 businesses of all shapes and sizes, from start-up and early stage businesses through to fast growth SME's and successful multi-national organisations, The Clubhouse looks after clients such as UBS, Morgan Stanley, BP, Grosvenor and KPMG.
Our income is derived from a number of different revenue streams, which we expect will lead to a stable business with predictable income streams:
Memberships (50%): Annual memberships designed around the needs of both individual entrepreneurs and large corporates contribute the bulk of our revenues, with high visibility of income due to member retention rates of c.68%.
Meeting rooms (40%): Over the past 12 months we have arranged over 5,000 individual meeting room bookings, of which 20% were to non-members. We give a donation from each meeting room booking to The Peter Jones Foundation.
Other(10%) The remaining 10% of our revenues come through the provision of virtual office solutions to our members, events, point of sale and partnership income.
Use of proceeds
This campaign is a pre-emption campaign on a £300,000 equity investment that has been raised offline. We are looking to further strengthen our team and invest more into technology in order to enhance the level of service we provide our members and to remain one of London's leading business members club and meeting space.
Please note that the company currently has the following debts and outstanding equity interests.
- £4m Venture Loan of which all has been drawn down. Capital repayments are expected to start in November lasting 42 months for each tranche and interest is charged at the higher of 11% per annum of 900 basis points over 12 month GBP LIBOR.
- This Venture Loan has warrants to subscribe to equity for the value of 15% of the outstanding loan balance at a strike price of £7,645,000. Conversion of these warrants would lead to dilution for investors.
- The Company has 3 convertible loan agreements. 2 of these are dated 17/01/2017 and have a current outstanding principle of €125k each and accruing interest at 11.5% per annum. They are both convertible at a €19.857 share price on either a £2m funding round or an event agreed between the company and the lender at the time. The lenders also have an option to increase their loan by €100k within the first 2 years of the agreement date. The 3rd convertible is worth £200k, is convertible at a strike price of £4.848 and accrues interest at 10% per annum. It is convertible at the lenders discretion or ahead of fundraising or sale. It is not converting on this raise. These loans will dilute investors if they convert to shares.
- The Company has a number of lease agreements totalling c.774k relating to furniture and other items used in the Clubhouse properties.
Funds raised as part of this campaign won't be used to pay these loans.
We have identified 4 archetypal members of The Clubhouse for whom we provide a solution:
They want to get out of the home environment into a professional working environment and meet like-minded people.
They need a well-located London base from which to go and have client meetings and work at in between meetings.
These are people who are looking to save money by closing or down-sizing their London office but still want a central London presence, or don’t have sufficient meeting room space at their current offices.
Start-ups and early stage companies who want an office base whilst in the early stages of growth, and who will move on to take their own offices.
Characteristics of target market
The market opportunity is significant:
- Many fast growing businesses do not want to tie themselves in to 5, 10 or 15 year office leases and do not want to commit capital to a central London office.
- There are 4.5m self-employed people in the UK.
- Circa 550,000 new business started up last year
- Mobile technology and cloud computing have changed the way people work, allowing for much more mobile and flexible working: 'cappuccino commerce'
- In The City of London, the amount of serviced office space has quadrupled since 1995 and is set to double again over the next 10 years.
- c.Over 2,250 businesses employing an average of 8 people are currently based in serviced offices in The City – with many more using coffee shops and hotel lobbies: our core target market.
Since we launched in 2012, The Clubhouse has largely grown by word of mouth. Currently home to some 374 companies, and 950 individual members, we have a proprietary database of over 36,000 people to whom we market every month.
Two thirds of our members come via word of mouth and referrals. Outside of this, we raise awareness further by:
- Proactive marketing campaigns with carefully placed adverts in The FT, and British Airways Business Life magazine.
- PPC campaigns and digital marketing primarily focused on boosting SEO and via Google Adwords, Bing Adwords.
- We host monthly guest speaker events for our members, guests and prospective members and have hosted evenings with Luke Johnson, Nick Jenkins, Sinclair Beecham, Justin King, Paul Lindley and Lord Bilimoria to name but a few.
- We have sponsored prestigious awards such as the UK Private Business Awards and have aligned ourselves with a number of business networks.
The growth in the flexible workspace market has been phenomenal over recent years and the continued growth in the market is expected to be equally strong over the coming years as demonstrated by recent investments into the likes of WeWork (valuation $20bn) and TOG (valuation: £500m).
In providing a network of innovative, design led flexible meeting and workspaces in central London created around the needs of both fast growing SMEs and large corporates who are looking for a smarter, more flexible alternative to a London office or a better way to do business, The Clubhouse fills a gap in the market for those for whom meeting in a hotel lobby or coffee shop is unprofessional and a central London office 5 days per week is not required.
With our focus on providing the best possible service to our members and with one core aim of making our members and their businesses more successful, put simply: no one does WHAT we do, HOW we do it.