- Investment sought:
- Equity offered:
Trillion is a crowdfunding platform that raises money for environmental and social projects from ordinary people who want better returns.
We focus on loan based crowdfunding in green energy and social investment, and earn a percentage of funds raised, paid by borrowers, and an annual percentage of funds lent, paid by the lenders.
Using profit as motivation we aim to re-engage consumers with their money and help them make a profit and make a difference.
We effectively operate a two sided network, bringing together people with money and those who need it. We aim to do it quickly and cost effectively and to try make connections between people and projects that provide more value than just financial backing.
We aggregate small amounts of money from large numbers of investors and in doing so:
• Raise capital cost effectively for projects and businesses
• Fund smaller projects that the banks won’t finance
• Offer higher risk adjusted returns than small investors can normally access
Our goal is to be raising almost £500 million a year for environmental and social businesses and projects, from a base of 100,000 active lenders and investors.
Substantial accomplishments to date
MEMBERS: Trillion already has a base of 14,000 members of whom 5,000 are active funders.
POLICY: Julia Groves is founding Chair of the UK Crowdfunding Association, sits on the DECC community energy finance working group and is a member of HMT's consulting group on p2p ISAs. Theresa Burton is also a Director of the UKCFA and sits on the Social Economy Alliance Finance working group, of which Buzzbnk (now Trillion) was a founding member.
AWARDS: In 2014 alone Julia has won "Business Green Entrepreneur of the Year", Michael Norton OBE was awarded with the "Outstanding Achievement Award" at The Charity Awards in 2014, Theresa Burton, has been shortlisted for an award as “2014 Social Enterprise Women’s Champion", and Trillion was named "Funder of the Year" by Community Energy England.
PARTNERS: Include Albion London on design & digital, Seedrs for client money, and Abundance on securities regulation as well as leading organisations in the charity and social enterprise sector, such as NCVO, School for Social Entrepreneurs, the Community Development Foundation (CDF) and The Young Foundation.
TECHNOLOGY: A proven platform designed to offer white label capability from day one and already enterprise scale with 120 raises and three successful branded platforms in operation. In 2013 £200,000 of funding from NESTA and the Cabinet Office was awarded to extend the technology base.
PROFILE: Julia is regularly interviewed in the press as a crowdfunding expert; she is the founding Chair of the UK Crowdfunding Association a member of the Innovate Finance Founding 50 in the UK. Michael Norton and Theresa Burton are frequent speakers in the Social Investment sector.
We effectively operate a two sided network, bringing together people with money and those who need it. We aim to do it quickly and cost effectively and try to make connections between people and projects that bring more value than just financial backing.
On infrastructure projects we earn a percentage of funds raised (typically 2.5-4%) paid by borrowers, and an annual percentage of funds lent (normally 1%), paid by the lenders. These are deducted from borrower payments to the platform before we distribute lender returns.
Structuring costs such as the review of models, writing offer documents and due diligence process are paid for by the borrower, up front, and are not at risks. These are typically £10,000 per deal when asset backed.
Simpler and smaller social projects via the Buzzbnk.org P&L pay 5%.
Key to our success is the ability to structure and perform due diligence on deals cost effectively, and to build a membership base of repeat lenders and investors.
We also provide white-label services for crowdfunding where we typically charge setup and customisation fees up front, plus 1% of funds raised successfully. Thundafund.com is our first international client successfully operating in South Africa in Rands.
Use of proceeds
Trillion is raising a total of £1.5m in a Series A round of which we hope £500,000 will come from the crowd, the remainder from professional investors.
The funds will be used primarily to:
1.Invest in the technology platform to support a secondary market and ISA investments.
2. Run an extensive marketing campaign to build awareness and a trusted mainstream brand to reach 500,000 investors.
3. Expand the business development team to access £500m of deals p/annum by 2017.
We then anticipate a further £1.5m raise in September 2015.
Trillion is a platform for ordinary savers and investors across Europe with between £50 and £50,000 to lend or invest.
They are typically acting without advice, and like investing in real things – particularly asset backed loans, and they value wider social benefits in addition to (though not in place of) financial returns.
They are often using annual tax allowances to get better net returns on their money.
The addressable UK market is:
- £443bn is held in Individual Savings Accounts
- £100bn is held in Self Invested pensions
- up to 5.5m customers (about a third of the market) with savings/investment products within and outside of tax efficient accounts, looking for alternative provision*
* Described as 'financial orphans' and the 'disenfranchised', these 5.5m customers are lenders and investors who either can't afford financial advice, prefer to DIY, or are interested in alternative investments that IFAs and bank advisers lack the willingness or financial incentive to recommend.
Characteristics of target market
The p2p lending market is forecast to hit £2bn by the end of 2014, and is already raising £150m a month.
The businesses and projects raising money are generally SMEs that struggle to raise bank finance quickly and cost effectively, or indeed at all.
The social investment market is emerging and fast growing is estimated to be £750m in the UK by 2015 and £1 trillion globally in the next 10 years.
The announcement of a third ISA for loan based crowdfunding in 2015 opens up access to £50bn+ a year of retail money, and sends a signal that p2p lending is coming of age.
It also effectively reduces the cost of borrowing to businesses and potentially increases net returns for lenders.
This, along with the introduction of the Social Investment Tax Relief (SITR), creates very favourable tax conditions for this market to continue to grow.
Trillion already has a base of 14,000 members of whom close to 5,000 are active funders across social and environmental projects.
We engage members largely through content marketing and social media, but we have also benefited from significant press including appearances on BBC News and Sky News, coverage in The FT, The Times, The Sunday Times, The Independent, The Guardian, The Telegraph, Huffington Post, Forbes and many other publications.
For larger projects we put together digital marketing campaigns to drive traffic and "Offer videos" are a key element of the investor recruitment process.
For one of our most recent projects, a £1.25m loan for E2energy, refinancing installed turbines, on average one in five of the people who watched the Offer video invested, and one in three of those who read the Offer document invested.
Core to our marketing strategy is our ability to federate members, by which we mean raising money for businesses who have an established brand and customer or employee base that may also be co-funders. This also give us the opportunity to grow our membership in 'chunks' rather than organically.
The recent merger with Buzzbnk has made Trillion one of the largest social crowdfunding business in the UK.
The ability to run equity, debt and rewards campaigns gives us a breadth not available elsewhere.
Trillion also actively markets larger raises so saving PR and marketing costs for borrowers.
Our membership base is growing faster than our competitors, as is our twitter following, and we have access to bigger and better quality deal flow because the team has a proven track record and relationships in the sector.