- Investment sought:
- Equity offered:
WeSwap is an award-winning peer-to-peer travel money platform, now a leading provider in the travel money space. As of June 2019, we have over 500,000 users who have exchanged more than £255 million, and spent in 197 countries and territories worldwide.
The WeSwap app and Mastercard® lets customers swap currency with other travellers through our peer-to-peer technology, spend money globally, track rates and send money to friends. Last year, we also grew our portfolio of new travel money products - including buyback, next day cash delivery and transfers (beta) - which have increased and diversified revenue streams. In December 2018, WeSwap established its suitability for an IPO on AIM.
We’re on a break-even focussed plan to profitability. Alongside improving our core-product range, our focus is on further diversifying revenues, scaling our B2B2C partner solution and breaking into a new, emerging international market - we've now agreed a commercial framework with a local provider for launch this year.
Note to investors: the company has different share classes in issue, along with an outstanding convertible loan. Please see details under the "Key information" section of this campaign.
The travel money market is enormous; over £45billion is spent on visits overseas by UK travellers each year. And despite advances in digital banking, the most popular providers today are still the traditional currency exchange bureaus such as Travelex and the Post Office.
We set out to make things fairer for everyday travellers, and we've already made great strides disrupting the market in the UK. We’re now expanding our business to further service the needs of the traveller, and also plan to launch WeSwap in new overseas markets. Our long term aim is to position WeSwap at the heart of the global travel ecosystem.
In 2019, we will be scaling WeSwap card distribution through our partner API technology, WeSwap Connect. This allows our travel partners, such as online travel agents, to integrate the WeSwap card in the travel booking flow with minimal dev time. We have signed a number of agreements with travel-related retailers, including a major car hire firm.
Substantial accomplishments to date
We launched WeSwap in the summer of 2015. Since then we have:
- Built a robust and scalable peer to peer travel money platform that has facilitated the exchange of over £255 million.
- Acquired over 500,000 users, with reducing acquisition costs.
- Established WeSwap’s suitability to float on the London Stock Exchange's AIM in preparation for a 2018 IPO. WeSwap completed extensive legal and accounting due diligence, including an audit of 3-years historical financial information to IFRS standard and had independent broker research published on the business.
- Agreed a commercial framework for launching WeSwap in a rapidly emerging market.
- Launched a portfolio of travel money products, including travel cash and buyback. These now generate an average of circa £2million in orders a month.
- Achieved a five-star rating on Trustpilot, with over 3,000 reviews.
- Won numerous awards, including the "Best Travel Money Provider" for two years running at the British Bank Awards, beating the likes of the Post Office and MoneyCorp.
- Launched WeSwap Connect and signed agreements with numerous online travel businesses.
- Consistently shipped features to improve retention and repeat use.
In 2018 we went from 18 currencies to global coverage and launched:
- An in-app rate tracker; a feature to split bills and send money to friends.
- A business expense tagging feature.
- SmartSwap where you can target the exchange rate you'd like and WeSwap will auto-exchange for you.
In 2018, revenues were in excess of £1.5million. Our revenues come from our swap and exchange fees, ATM usage and a percentage of interchange – the fee charged to merchants by MasterCard when the card is used. We also generate revenue through our travel cash product and other ancillary products. We are currently working on the following products which are planned to generate incremental value to WeSwap:
- Travel insurance.
- Fair lending.
- Money transfers.
These have been successfully beta-tested and we plan on launching these fully late 2019/early 2020. Further planned new business streams include WeSwap for Business, a subscription-based model and further growth in international markets.
Use of proceeds
We’re focussed on three key areas going forward:
1) Launching in new international markets. We hope to launch in a brand new country before the end of the year.
2) New products. Our card, app and cash delivery service are now well established in the UK. We’re now working on exciting new areas such as money transfers, fair lending for holidays, insurance and a subscription model.
3) New partnerships. We’re proud to be partnering with some great travel providers. We’re investing in this area even more in 2019 and beyond.
Our use of proceeds is set out below:
Development - 20%.
Product & UX - 6%.
Compliance (inc. Sign up) - 13%.
Banking Operations - 12%.
Marketing - 41%.
Customer Support - 8%.
The main thing is the opportunity to invest in our company, and share in our potential success. All investors get early access to new features through our Beta testing and WeSwap pioneers list, equity in the business and behind the scenes insight into our strategy.
There are also a few free swap perks not available to the wider public.
Invest between £250 - £500: Your next 3-day swap free
£501 - £1,000: 6 months free 3-day swaps
£1,001 - £2,500: 12 months free 3-day swaps
£2,501 - £5,000: 24 months free 3-day swaps
£5,001 - £10,000: 36 months free 3-day swaps
Over £10,000: Free 3-day swaps for life
If you’ve invested before, your previous investments will count towards your total swap perks. So, if you invested £2,000 in total across our last two crowdfunding rounds, then invest £501 in this one, you will have invested £2,501 and qualify for 24-months of free swaps.
Free swap perks will be applied once the round is closed and we receive details of everyone’s investment from Seedrs. This can take several weeks, so please bear with us. Once the round is closed we’ll work to confirm more detailed timings.
Unfortunately, we won't be able to offer Shareholder Card designs as part of this round. We'd love to, but we're about to launch a brand new card design across the whole WeSwap world, and we'd be unable to properly support both. Stay tuned for more on the new design soon though!
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.
The lead investor in this round is IW Capital, who have participated for a total of £1.7m to date. This investment is on the same terms as all other investors in the round and is included in the 'investment funded' amount at the top of the campaign. Investors should note that these funds have been deployed in a series of separate tranches from March 2019 to June 2019.
Please note that the share price for this round is £600. Due to this high share price, investors will be permitted to hold fractional shares. This means that the investment multiple will be £6, with the minimum investment being £12. WeSwap will seek to perform a subdivision of shares at the closing of this funding round, to achieve whole shares for all those with fractional entitlements.
The company currently has three classes of shares. All investors in this funding round will be receiving A Ordinary shares. The rights of the three classes are:
(1) Ordinary Shares: Ordinary shares with full voting rights and full participation in income and capital distributions.
(2) A Ordinary Shares: A class shares possess additional rights relating to the distribution of company funds following a liquidity event. On the occurrence of an Exit Event an amount equivalent to the capital subscribed by the holders of A Shares will, to the extent that there is sufficient capital available to do so, be returned to those holders in priority to any monies being returned to the holders of other types of shares.
(3) Z Ordinary Shares: Ranks pari passu in all respects to Ordinary shares, but holds no voting rights.
In addition, in connection with Ascot’s equity investment in WeSwap, Ascot has the right to a preferential payment of £900k on any exit or winding up of the company. This would be distributed to Ascot prior to remaining proceeds being distributed amongst shareholders.
Existing convertible loan note terms
The company has two outstanding convertible loans:
(1) £2m from IW Capital. The key terms are:
• interest rate of 13% pa to be paid quarterly in arrears
• repayable on the earlier of:
(i) the date of a listing, share sale, liquidation or disposal of the Company; or
(ii) the date which is the 12 months anniversary of the date of the Convertible Loan Note Instrument, being 3 May 2020.
• they can be converted into A Ordinary Shares at any time at the request of the note holder, together with any unpaid Interest; and
• the obligations of the Company to repay the Convertible Loan Notes will be secured.
• the Conversion Price is defined by a Discount of 10% on the price paid for either:
(i) the most recent subscription price paid for A Ordinary Shares in a fundraising; or
(ii) on a share sale, disposal, liquidation or listing.
Should the investor choose to convert the note to equity, the conversion of the loan will dilute shareholders, including those investing during this funding round.
(2) £500k from Ascot
Ascot invested £500,000 in May 2017 by way of a convertible loan. The key terms of the loan are as follows:
• 20% interest per annum; and
• convertible at a 20% discount to the next equity financing round (subject to a minimum share price of £540).
Additional rights to equity
All Series B investment has been priced at £600 per A Ordinary Share. £8.2m of the Series B round was raised in 2018. Whilst there was a nominal value of £750 per share ascribed to the Series B round, it was structured with a price adjustment mechanism. The Series B investors were due to pay the lower of the next round of funding / IPO price or £750 per share. When the IPO did not proceed a fair value for the funding round was negotiated. £600 per share was in line with the IPO valuation and therefore considered to be a fair price.
Accordingly there is an additional 2,767 shares to be allotted (subject to shareholder resolutions / consents) at a nominal value of £1.00 per share to Series B investors who had advanced subscription in the round at £750 per A Share.
Please note, the company has outstanding investor loans of £849k plus interest thereon at a rate of 12% per annum. The loan is to be repaid by 31 October 2019. None of the funds raised will be used to repay these loans.