andrew lawson - managing director |...

Andrew Lawson - Managing Director | [email protected] | +44 7932 638954 www.BoroughBox.com

mailto:[email protected]


Executive Summary

THE IDEA

BoroughBox™ brings the artisan & independent food market to your door.

We work with award winning and specialist artisan producers to deliver exceptional regional products across the country to the UK’s expanding, discerning food customer base. Products are available to purchase via our;

Food Discovery Club subscription “I met Andy (BoroughBox™ founder) at an event last year and we haven’t looked back, creating interesting ideas to inspire people. The plans for 2016 and the potential of having monthly subscribers is incredibly exciting” (Dr Deborah Quinn, Co-Curator of the BoroughBox™ Discovery Club) The BoroughBox™ collection of gifts & hampers "Everyone LOVED the hampers, such great feedback! Thank you very much, we will definitely be ordering more with you" (TubeMogul, BoroughBox™ Corporate Gift Client) Or as individual items through our online foodie marketplace “The BoroughBox™ Marketplace has proven to be a brilliant sales channel for the Godminster range of products. The new Discovery Club looks like a fab idea and we can’t wait to get involved” (Deborah B, Head of Sales & Marketing at Godminster) In addition to these growing and established channels we have plans to introduce the BoroughBox™ collection of gifts & hampers to a number of independent and high end retailers during 2016.

The company has plans to become the 'Not On The High Street of Food' and is seeking an

investment to aggressively grow and become the leading player within the markets we

operate.



INTENDED IMPACT

Our founder, a passionate foodie, combined a digital background with his trader experiences at the world famous Borough Market, to officially launch BoroughBox™ in May 2014. The goal being to bridge the divide between regional producers struggling to attract hungry consumers outside of their natural catchment area, and in turn those consumers having nowhere to discover new products and producers.

With Borough being an area of London synonymous with incredible food & culture, from the world famous Borough Market, to the hustle and bustle of the South Bank featuring sizzling street foods and specialist producers, BoroughBox™ was born. A definitive destination and easily identifiable brand for foodies.

Since launch in May 2014 BoroughBox™ has generated in excess of £225,000 of revenue from a mixture of corporate and consumer customers, and now represents products from over 100 specialist artisan food and drink producers on BoroughBox.com.

With 5,800 food and drink SMEs in the UK and the online channel set to be the fastest growing part of the grocery market, almost doubling in value by 2020 to £17.2bn, there is an incredible opportunity for BoroughBox™ to grow exponentially.

CONSUMERS

At present we are seeing a consumer shift towards localism and a desire to move away from spending money at the major supermarkets. Some independent research BoroughBox™ commissioned through specialist research agency BrandHook, identified that half of the Londoners they spoke to would love to be able to visit farmer’s markets more often and that if money was no object, 40% of their supermarket spend would be at these types of market(s).

This research validated what we believed when BoroughBox™ launched in May 2014. Consumers love exploring and shopping at independent food markets & fairs and want more of it, but time, location and minimal opening hours make it challenging.

The range and quality of traders and products at independent markets & fairs in the UK is phenomenal. Our online marketplace and food discovery subscription give access to these products so that everyone across the country can take a genuine journey through food, experience exceptional produce, and have it delivered directly to their door.



Challenges we solve for traders/producers:

Cost – Through powering an online marketplace where selling works on a purely ‘pay for performance basis’ BoroughBox™ present an even playing field for any sized business. Supporting and nurturing these businesses through a single all-encompassing brand elevates our credibility and creates unique, cost effective opportunities to reach consumers through trader led marketing.

Open All Hours – The BoroughBox™ marketplace is open 24 hours per day, 365 days per year. And it never rains!

Range - An online market is not limited by square footage and can fully embody layer upon layer of food & drink categories, and trends.

Challenges we solve for customers:

Knowledge – New foods and artisan products can seem intimidating to the uninitiated. Our food discovery subscription offers tips and information to demystify new foods and enlighten the grey matter. Foodies love new culinary discoveries, and in turn love to talk food and share information with others.

Convenience – We may fantasise over the idea of travelling to every nook and cranny of the UK and visiting all the markets, fairs, events and festivals, but the reality is that in such a time poor society with unpredictable weather, it is simply impossible. BoroughBox™ provides a destination and product range to allow anyone with an interest in the food they eat to journey through new products, or order time and time again from their favourite trader.

Ethics – With 57% of consumers surveyed wishing that they could shop at farmer's markets more often (according to our BrandHook Research), and the UK population swelling in numbers interested in the ethics of the food they eat, the BoroughBox™ model offers multiple opportunities to indirectly invest in supporting, nurturing and increasing the sustainability of independent traders & producers.



CORPORATES

Businesses are increasingly looking at how they can stand out from other suppliers and service providers, from their employee rewards and perks, to enhancing business relationships and engaging with frequent customers. The Corporate Service from BoroughBox™ offers the perfect solution. Distinct. Thoughtful. Different.

The original BoroughBox™ collection of gifts contained outstanding items from Borough Market, and the range is now set to expand and incorporate many of our own superb marketplace sellers. From a small, beautifully packaged collection of condiments, to a full blown hamper or a series of bespoke, co-branded gifts – an increasing number of corporate clients are choosing the outstanding BoroughBox™ Corporate service.

“I decided to use BoroughBox™ for my corporate gifts and hampers for Christmas 2015. The team at BoroughBox™ handled my order efficiently and professionally from start to finish and I received many positive comments from my clients. I would highly recommend them.” Sam Wickens (Wickens Wealth Management)

FOR PRODUCERS & TRADERS

Artisan producers work with us to promote and distribute their products to a larger audience of consumers, saving them time to focus on their passion of producing great food and drink.

As the BoroughBox™ founder has direct experience of market trading, we understand first-hand the challenges facing independent food businesses. We have an extensive network of contacts within the industry and crucially we have an intricate knowledge of the food cycle, which can be half the battle of anyone trying to work in the industry. We decided to remove factors such as unpredictable weather and the head scratching of eCommerce for our clients, and began building the BoroughBox™ Marketplace as a collective, collaborative foodie destination. The ultimate market.

Underlying all of this completed hard work is our monthly Discovery Club subscription, which takes the concept to the next level. We are perfectly placed to harness the BoroughBox™ seller base and the reputation we’ve earned by targeting aggressive growth and introducing even more amazing producers and products, to an even wider audience of eager consumers.

As we grow, the market insight we get from our customers will allow us to collate detailed and comprehensive data on new product offerings, which we believe would enable us to track and predict future trends in food.



UNIQUE MARKET POSITIONING

The extensive appeal of the BoroughBox™ brand across our 3 core revenue streams of Online Marketplace, Gifting and Food Discovery Subscription gives us a unique advantage in cross-selling and upselling to our customer base.

CUSTOMER STORIES

Belmond Ltd is a high-end hotel and leisure company. Secured as a corporate client for December 2015 employee gifting (value £3.5k). Extremely pleased and rebooked with us for external client gifts January 2016 (Value: £1k). Voucher inserts into these gifts for the BoroughBox™ Food Discovery Club have yielded our first 3 month rolling subscriber. (Value: initial purchase £75 with £99.99 every 3 months thereafter).

Howard Kennedy LLP is a Legal 500 Law Firm. First secured as a corporate client in December 2014 for employee gifts (Value: £15k). Throughout 2015 they have purchased a number of small gifts and prizes for events (Value: £1k). In December 2015 we saw a number of personal gifts being purchased through our online marketplace and we were once again invited to fulfil their employee gifting needs (Value: £15k). In January 2016 we have been asked to create ongoing 'new joiner boxes' for all new employees, approx 15 per month which will all include vouchers and promotional material for the Foodie Marketplace and the BoroughBox™ Food Discovery Subscription. Ongoing business. (Value circa £600/month).



SUBSTANTIAL ACCOMPLISHMENTS TO DATE

Generated in excess of £225,000 in revenue since launch (May 14).

Over 2,000 BoroughBox™ branded gifts delivered across the UK in December 2015 alone.

500%+ growth in online consumer marketplace sales in the key trading month of December (Dec 2014 vs Dec 2015)

Average order value of £46.86 in our online marketplace in 2015

30 x Discovery Club subscriptions since we soft launched the scheme in January 2016.

Upwards of 100 traders & producers already officially sell their products within the

BoroughBox™ online foodie marketplace. A cherished and hard fought position of trust and mutual respect.

Two BoroughBox™ trademarks awarded.

An enviable corporate client base of more than 30 high value customers including Bosch/Siemens/NEFF, Hilton, Knight Frank, Harper Collins, Close Brothers and etc.Venues.

Our media channels are active and growing, with over 3,000 Twitter followers, 700+ Facebook page likes, a growing Instagram presence and 5,000 newsletter subscribers.

0

2000

4000

6000

8000

10000

12000

Marketplace2014/15

Marketplace2015/16



MONETISATION STRATEGY

We are building THE online destination for artisan and independent food in the UK. We’ve achieved a great deal in 2015 and also learned a lot about what works and what doesn’t for our customer base.

Our plan now is to:

1. Focus on customer acquisition, retention and scaling of the Discovery Club subscription business (gifts and personal subscriptions).

2) Increase the repeat spend of existing customers.

3) Continue to grow the corporate client base and offering, whilst converting end recipients into consumer customers.

4) Extend into new retail markets (bricks & mortar retailers and gift outlets)

Scaling the Discovery Club subscription product is important for a number of reasons. It presents a clear and linear focus for targeted growth, delivering repeat revenue, financial stability, and a greater profit per customer. The long term benefit being the introduction of the full BoroughBox™ Marketplace ideology for multiple personal and gift purchases. We have a number of loyalty initiatives planned, including our Box Points scheme (already running) alongside genuine member feature benefits.

As the subscription base grows, we will also increase our purchasing power and unlock additional streams of revenue such as partnerships, co-branding and market research that leverages our consumer data.



Corporate sales remain a major focus due to the evident natural crossover of end recipients becoming long term consumer customers.

Every BoroughBox™ vessel presents an opportunity to cross sell our services and brand. Soon after launch in 2014 we were fortunate to secure a substantial one-off deal with an impressive corporate client, NEFF, which not only proved the appeal of our product but catapulted us forward into 2015.

At the time we had a team of just two, so very few other seasonal deals and contracts could be explored without creating operational issues. The recent 2015 seasonal spike generated less revenue than the previous year, but proved incredibly successful with the number of corporate clients using BoroughBox™ as their corporate gift partner increasing by 400% and client feedback extremely positive. We now have an experienced, full-time Sales Manager, who can target both large one-off deals alongside long term contracts and seasonal purchases.

Finally, having seen success with our BoroughBox™ branded products and received great customer feedback, we are now actively engaging with traditional and high end retailers to increase our reach. These additional channels will extend brand awareness and introduce a new audience of consumers and sales.

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

De

c-1

4

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Corporate Sales



COMPARABLE BUSINESSES

BoroughBox™ represents a substantial investment opportunity with its unique position within the marketplace. Although unique in our brand and approach, the following two businesses offer a number of comparables and highlight the growth and scale that can be achieved.

Notonthehighstreet.com

Notonthehighstreet.com provides collections of products from 5,000 independent businesses and designers. Founded in 2006, the company has the slogan 'one basket, hundreds of unique shops'. Revenue has grown from £134,000 in its first year to £127m in 2014. Following investment of £300,000 in 2007 the business grew rapidly. In the first year the business turned over £199,000; the next it was £900,000. Then it hit £2.3m in 2008. In 2013 six of their seller partners made £1m through selling their goods on Notonthehighstreet. Crunchbase Timeline - Total Funding Rounds (5) - $36.19M Aug, 2008 - undisclosed amount / Venture Aug, 2010 - $11.9M / Series C (Index Ventures) May, 2012 - $15M / Series D (Eight Road Ventures) Nov, 2013 - undisclosed amount / Series A May, 2015 - £6M / Debt Financing

HelloFresh

HelloFresh is the global leading provider of fresh-food at home. HelloFresh operate a soft subscription model business which enables them to provide each and every household in its 7 markets with the opportunity to enjoy wholesome home-cooked meals with no planning, no shopping and no hassle required delivered to their door. HelloFresh started early in 2012 delivering to Berlin, Amsterdam and London. Having launched on the East Coast of the U.S in December 2012, HelloFresh moved to cover the entire country in September 2014. Over the short time since then, HelloFresh has grown rapidly to become one of the largest players in this market and in November 2015 served 6.1m meals in 7 countries across 3 continents. Crunchbase Timeline - Total Funding Rounds (5)- $278.5M Dec, 2012 $10M / Series B Sep, 2013 $7.5M / Series C (Phenomen Ventures) Jun, 2014 $50M / Series D (Insight Venture Partners) Feb, 2015 $126M / Series E (Rocket Internet) Sep, 2015 $85M / Series F (Baillie Gifford)



USE OF PROCEEDS

Following a successful end to 2015 we are now seeking investment to capitalise on the position we’ve established. We intend to use the investment to retain our exceptional team, increase our very limited marketing spend, improve systems and processes to ensure our growth and capacity are aligned, and continually improve the customer journey.

The 2016 model for BoroughBox™ is simple: growth and retention.

1. Permanently employ our highly experienced Head of eCommerce and build a larger team to scale for rapid growth.

2. Provide budget to implement a major customer acquisition marketing strategy

3. Expand our corporate gift product range and grow the business development team

4. Launch the BoroughBox™ branded gift range into retail stores

In 2015, the small BoroughBox™ team made exceptional progress. Our consumer marketplace saw year on year growth of over 500% in December and our own gifts were enjoyed by over 2,000 recipients.

Invest in BoroughBox™ and imagine what we can achieve in 2016 and beyond.



TARGET MARKET

BoroughBox™ customers are discerning consumers and clients who have an interest in the quality of the food they eat, and full provenance of product. With a typical ABC1 core demographic we began our focus on London & the South East, then expanding throughout the UK. Our online marketplace services consumers nationwide who are sourcing and purchasing products they can’t buy locally. They may have purchased a certain product from a regional producer they saw at a market or food show and want to purchase that product again. The BoroughBox™ online marketplace makes that happen by removing location and time limitations, and ‘bringing the market to your door’.

We believe there is also strong potential for international gifting growth thanks to the profile of our BoroughBox™ branded product range, and have already sent items to several countries.

Examples of customer feedback on Facebook and Twitter:

"Wow! Thankyou BoroughBox! What a stunning hamper, delivered to my door today"

"Much yay to @BoroughBox for saving me and my boss with last minute Xmas presents! Check them out #foodies : )"

Characteristics of target market

Consumers are becoming increasingly discerning about their food choices. Our own research commissioned with BrandHook is echoed by a study from insurance firm Simply Business which has shown there are now a quarter more independent food stores in the UK than there were in 2013. The rise of independent food and drink retailers and the antithesis with the supermarkets in the public eye, supports an increased desire to buy local and specialist food and drink. Alongside continual food scandals in the press the savvy consumer is eager to follow an ethical path for the produce they consume.

Subscription models are succeeding.

We’re one of the first artisan producer subscription businesses in the UK, but comparable businesses include:

Beer52 (craft beer) grew from 2500 members to 5000 in 6 months Naked Wines (wine) has 140,000 customers in the UK Graze (boxed snack) has over 300,000 weekly UK customers Abel & Cole (organic veg box) delivers over 50,000 boxes per week



MARKETING STRATEGY

After 18 months of trading we are confident that there is a latent demand for a Food Discovery subscription product of this type. In order to scale our subscriber base rapidly we need the skills to drive growth, and that comes through hiring and retaining experienced people and engaging with the right digital channels to exploit opportunities effectively.

Our staff already include an incredibly talented eCommerce Manager (temp keen to go perm) who’s CV includes buyagift.com & voga.com, an experienced Head of Sales, and a very capable Social Media intern who is able to give more time when we can afford it. In the short time we’ve had these staff members we’ve seen fundamental differences to the BoroughBox™ business.

This combination of knowledge, experience and input from individual departments, on top of the experience of the senior management team, we are very confident of creating and executing a multi-pronged marketing strategy with a focus on return on investment. Tactics we intend to use include:

Affiliate Marketing. A member of the senior management team has a decade of experience, and invaluable network of contacts, in this 'pay for performance' marketing channel which proved hugely successful for Graze.com and other food and gift subscription businesses.

Developing marketing partnerships with producers to leverage their networks and footfall.

Member-get-Member incentives.

Targeted PR to raise awareness.

Creating and seeding our own content.

Paid digital advertising that we can track, tweak and enhance to ensure a predictable and decreasing cost per sale.

Engaging social media, on our own channels and with producers.

A variety of regular and one-off events, designed to drive interest, PR and memberships.



Competition strategy

Our trademarked brand name, BoroughBox™ is strong and instantly identifiable due to the synergy with such a globally renowned food area of London. Our own branded BoroughBox™ suite of products gives us an opportunity to insert marketing material within each item sold through all channels (subscription, corporate, retailer, marketplace) to raise the profile of other BoroughBox™ offerings and drive repeat purchases. With our strong management team, proof of concept more than complete, and sales already underway – we are in a fantastic position to grow a food related business online.

EXIT STRATEGY

Once BoroughBox™ has successfully established itself as a leading foodie destination and brand, demonstrating significant growth and a broad customer base, it would become a highly desirable target for any number of larger food related companies or private investors.



CORPORATE INFORMATION

Company Directors

Andrew James Lawson

Gavin Lee Male

Registered office

64 Southwark Bridge Rd, London, SE1 0AS Company number

07591686 The company’s principal place(s) of business (until Feb 28th 2016)

Block J312, Tower Bridge Business Complex, 100 Clement’s Road, London SE16 4DG The existing shareholders

Andrew Lawson – 6900 Shares (69%)

Gavin Lee Male – 2300 Shares (23%)

Donnie Bachan – 400 Shares (4%)

Tony Hopkins – 400 Shares (4%)

Company Advisors

Tax Assist Accountants 64 Southwark Bridge Rd, London, SE1 0AS

Historical Information

Borough Box Ltd was registered in May 2014 as a change of company name and

trade from a previous single-employee entity Discover Data Ltd, which Andrew Lawson ran some years before and was registered in April 2011. The role of this business was completely unrelated with Andrew acting as an on-site digital consultant. This has not affected our SEIS / EIS pre-approval.



Investments as of January 2016

Andrew Lawson (Founder) - £55,000

Gavin Male (Founder) - £15,000

Tony Hopkins (Investor) - £30,000 to purchase shares in September 2015

This September 2015 investment leaves us with £120,000 of pre-approved SEIS allowance



MANAGEMENT EXPERIENCE

Andrew Lawson (MD) spent more than a decade working on various areas of online

advertising and marketing for a large number of retail, travel, charity and tourism organisations in line with the growth of the internet. He has also been a co-owner of a business located within Borough Market. This unique position gives him a solid understanding, position and network base across both the specialist food and online sectors. A true big picture and forward thinker his passion is brand and product. He is able to converse fluently with all departments to bridge the divides between tech, operations, marketing, sales & product development to successfully deliver opportunities for growth.

Gavin Male (Director) has worked in digital since 2000 and been a Managing Director within the sector since 2010. Twice shortlisted for UK Digital Entrepreneur of the Year (2013, 2014) he has a wide range of management, online and marketing experience as well as a passion for fine food and good eating. Since relocating to New Zealand for family reasons in November 2014, Gavin maintains an active role in the BoroughBox operations providing senior level strategic input and being actively involved in day to day marketing initiatives, which leverage his network in the UK industry and the technologies he has access to through his NZ digital business.

Donnie Bachan (CTO) has over 15 years of experience in web and mobile strategy with a focus on ecommerce and customer acquisition. Having developed a platform which helped transform revenues from £800k to £5m in 5 years at his previous employer he started working with early stage businesses to ensure they have a solid technical platforms and product/market fit by employing lean methodologies and a data driven mentality.

John Hopkins (Sales Manager) has worked in sales for over 15 years and has a strong focus on generating revenue and customer service. Having worked predominately in large organisations, he is relishing working in a smaller, dynamic environment and is able to use his experience and contacts within the City to move the business forward. His ability to form close relationships with clients has already generated success.

James Barber (eCommerce Manager) has over nine years of experience in the world of eCommerce, working for a range of businesses, both large and small. He has focused on creating user friendly websites and developing strategies to grow revenue through various digital marketing channels. He has spent the last four years working for start-ups and has built high performing teams and achieved large scale revenue growth.



PRICING POLICY

We achieve 40 - 45% Gross Profit on our own BoroughBox™ branded range.

We achieve 20 - 25% Gross Profit for online marketplace sales.

SWOT ANALYSIS Strengths

Significant revenue, customer numbers and achievements since launch give us a

strong platform to build from with our new product offerings and expanded range.

Our management experience is substantial in a variety of areas of online and retail. Having a more senior management team brings a realistic, calculated and mature approach to growing the business along with an invaluable network of contacts across the sector(s) in which we operate.

Our brand and USP are instantly recognisable with the customers we are targeting.

The artisan & independent food sector is growing.

Our core customer base is affluent and accessible through local, targeted advertising and promotion resulting in lower barriers to entry of market and quicker growth and profitability. Weaknesses

Key staff are currently operating on temporary contracts. These staff have proved

integral to the recent successes of the business and we need to hire on a permanent basis to retain the team that has already participated in our achievements to date.

Lack of marketing and advertising budget limits our reach and ability to acquire customers at an effective rate.

Due to ongoing reinvestment of revenue by the management team into improvements across all areas of the business including premises, technology, brand & packaging - all of which give the brand further credibility - the balance sheet and cash flow restrict our ability to hold stock and drive growth.



Opportunities

There is substantial growth potential in online and subscription food businesses. With customers continuing to become more comfortable with home and office delivery, or click and collect services, our model is well placed to capitalise.

We feel there is a unique gap to commercialise traders and products through a co-operative approach, nurturing, supporting and helping producers generate an additional revenue stream by selling their products to an audience eager to 'feel good' about buying these products.

Subscription businesses are becoming more established and we see the Food Discovery Club as a strong area for unlocking customers in all areas of the brand.

Threats

BoroughBox™ is a unique business. Although there are similar competitors in each

of our core revenue streams, no other business offers such a complete range to meet the online foodie requirements of the UK.

Meeting market expectations with capacity on artisan products. Producers create limited quantities of their products and cash flow and shelf life restricts the amount of stock we can currently hold as a business. A well planned lead in time for spikes is important and something we are now experienced at managing for seasonal gifting.



GROWTH PHASE

BoroughBox™ began strongly in its first 6 months of trading in 2014. Reinvestment was immediately made for a more powerful marketplace.

2015 saw sound technical foundations laid, key staff hired, the client and customer base expanded, the brand fully established, and online sales increase by over 500% in December 2015 vs. the prior year.

The goal for 2016 is aggressive expansion through customer acquisition and retention.


andrew lawson - managing director |...

Documents